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Shock AFPC Decision Sees No Minimum Wage Increase for 2009

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On 7 July 2009, in its final minimum wage setting decision, the Australian Fair Pay Commission (‘the AFPC’) decided that minimum wages will remain at their current levels and not be increased in 2009.

In making its decision, the AFPC referred to the need to protect jobs and to support a stronger recovery in employment as the economy improves.

The AFPC expressed grave concern that an increase in minimum wages in the current financial climate would reduce employment and working hours and consequentially lower living standards for many Australians.

The next minimum wage review will be undertaken by the Minimum Wage Panel of Fair Work Australia (‘FWA’).¬† In accordance with the Fair Work Act, FWA must conduct and complete a minimum wage review in each financial year.¬† Any determination to set, vary or revoke minimum wages comes into operation on 1 July in the next financial year.

Accordingly, current minimum wages will remain in place until 1 July 2010 at the earliest.  Despite this decision, it is important for all employers to ensure that they are compliant with their minimum wage obligations.

Author: Katrina Sweatman