The Fair Work Commission (FWC) has decided to increase the Modern Award wages by 5.75% and the National Minimum Wage by 8.6% from 1 July 2023. This coincides with the increase to the Superannuation Guarantee percentage which will increase from 10.5% to 11% on the same date.
It is crucial that employers ensure that their employees’ rates of pay are compliant from the first full pay period which starts on or after 1 July 2023.
Employers should carefully review their employees’ existing rates of pay and make any necessary adjustments to their payroll. This involves updating wage calculations, tax withholdings, superannuation contributions, and any other relevant payroll components affected by the increase.
Employers paying employees on salaried positions must also carefully consider the minimum wage increase. It is crucial to ensure that these salaries meet the minimum wage requirements. This evaluation should consider any additional entitlements owed to the employee, such as overtime, penalty rates, and all other allowances.
Non-compliance with minimum wage requirements may result in legal disputes, penalties, fines and substantial reputational damage all of which were seen in the highly publicised collapse of the Colombaris restaurant group as just one relatively recent example. Employers should seek legal and accounting advice if uncertain about their obligations or require assistance in implementing necessary changes.
The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.