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Employment Law Update — Minimum Wage Increase & Sunday Penalty Rate Transitions

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By Herbert Fischbacher, Principal, MST Lawyers

Minimum Wage Increase

The Fair Work Commission (‘Commission‘) made a decision on 6 June 2017 to increase both the national minimum wage and the modern award minimum wages by 3.3%.

This takes the national minimum wage from $17.70 per hour ($672.70 per week) to $18.29 per hour ($694.90 per week).

The impact of this decision is that:

  1. employers who employ employees under modern awards will have to increase the rates of pay paid to employees falling under all classifications by 3.3%;
  1. employers who employ employees under registered agreements (i.e. certified agreements, collective agreements, enterprise agreements, AWAs or ITEAs) will have to ensure that the base rates paid to employees exceed the increased base rates of pay in the equivalent modern awards; and
  1. employers who employ employees not covered by a modern award or a registered agreement will have to ensure that the rates paid to employees exceeds the national minimum wage.

The increases to minimum wages will take effect from the first full pay period commencing on or after Saturday, 1 July 2017.

MST Lawyers offers an Annual Updater Service to assist employers that are uncertain how to calculate the new minimum wage rates that apply to their workforce. Click here for more information regarding our Annual Updater Service.

 

Sunday Penalty Rate Transitions

On 23 February 2017, MST Lawyers published an article summarising the Commission’s decision to reduce Sunday and Public Holiday penalty rates in some Modern Awards covering the hospitality and retail sectors.

On 5 June 2017, the Commission confirmed that the changes to Sunday penalty rates would be phased in over four financial years in the retail and pharmacy sector and over three years in the hospital and fast food sectors.

The following table shows the Sunday penalty under each Modern Award that will commence on the 1 July of each financial year.

AWARD

16/17

17/18

18/19

19/20

20/21

General Retail (full-time and part-time)

200%

195%

180%

165%

150%

General Retail (casual, inclusive of casual loading)

200%

195%

185%

175%

175%

Pharmacy (full-time and part-time)

200%

195%

180%

165%

150%

Pharmacy (casual, inclusive of casual loading)

225%

220%

205%

190%

175%

Fast Food (full time and part-time, level 1)

150%

145%

135%

125%

125%

Fast Food (casual, level 1, inclusive of casual loading)

175%

170%

160%

150%

150%

Hospitality (full-time and part-time)

175%

170%

160%

150%

150%

Hospitality (casual)

175%

175%

175%

175%

175%

The Commission confirmed its previous position that there would be no transitional arrangements for the reduction in public holiday penalty rates, and rejected proposals for:

  1. ‘take-home pay orders’ to compensate employees for a reduction in their pay;
  2. ‘red circling’ whereby current penalty rates would be preserved for existing employees; and
  3. the introduction of flat rates (at least until there is more information before the Commission in the form of an application to vary a Modern Award).

Further information is available from our Employment Law  team by email or by telephone Ph: +61 3 8540 0200.