The Fair Work Commission Announces a 5.75% National Minimum Wage Increase for FY23/24
On 2 June 2023, the Fair Work Commission handed down its minimum wage decision which provides for an increase of 5.75% to the base rates of pay in the modern awards as well as the national minimum wage.
The Fair Work Commission also decided to align the national minimum wage with the C13 rate, rather than the C14 rate as it has previously done.
As a result, the national minimum wage will receive an effective increase of 8.6%, from $21.38 per hour ($812.60 per week) to $23.23 per hour ($882.80 per week) from 1 July 2023.
Businesses covered by a Registered Agreement
Businesses that are party to a registered agreement (e.g. certified agreement, collective agreement, enterprise agreement, AWA or ITEA) must ensure that the base rates of pay provided under that agreement meet or exceed new minimum base rates of pay under the relevant underpinning modern award.
If you are covered by a registered agreement (e.g. certified agreement, collective agreement, enterprise agreement, AWA or ITEA) that was made prior to 1 January 2010, you have what is now called a ‘zombie agreement’.
Each and every zombie agreement in Australia will automatically terminate on 7 December 2023 unless an application is made to the Commission before 7 December 2023 to extend the operation of the agreement. This is known as ‘sunsetting’.
In preparation for sunsetting of zombie agreements:
- You must issue a written notice to all employees still covered by your zombie agreement:
- to advise that they are covered by the agreement; and
- that the agreement will terminate on 7 December 2023 unless an application is made to the FWC to extend the operation of the agreement.
- You should consider whether to:
- apply to extend the operation of your zombie agreement;
- allow the sunsetting to occur and revert back to coverage under modern award(s);
- negotiate an enterprise agreement with your employees to replace your current zombie agreement. Note: Legislative changes to the “Better Off Overall Test” will take effect from 6 June 2023, with the intention of encouraging businesses to make new enterprise agreements.
Confused? Need help?
MST Lawyers offers an Annual Updater Service to provide businesses with a summary of minimum wage rates that apply in the 2023/24 financial year.
Businesses that register for the Annual Updater Service will be provided a summary of new minimum wage rates for each job classification contained in the relevant modern award or, if applicable, in its registered workplace agreement.
To register for the Annual Wage Updater service, please find information here relating to the fixed fee cost associated with the update, together with the registration form.