The minimal wage is about to rise on February 1, 2021

The minimum wage in Australia is expected to rise on February 1, 2021. Who does it apply to and what should you know? Read on to learn more.

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The minimum wage varies between countries, with some being more generous than others. According to the annual wage review, the minimum wage for Group 3 employees will increase on February 1st. Read this article to find out if this applies to you and what you can do as an employer or employee in the future.

The official government announcement can be found here.

What is the minimum wage?

The National Minimum Wage (NWM) is the minimum wage standard that has been set for all employees in Australia. Failure by an employer to pay at or above the NWM can be subject to serious legal consequences. If you find yourself in this situation, check out this article that explains step by step what an employee should do.

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What triggered the change?

The annual wage review required by the Fair Work Act 2009 is a national discussion that takes place once a year. They discuss key issues related to wages for Australian workers such as the national minimum wage and the modern minimum wage for awarding each fiscal year. In the last version they decided to increase the NWM for all Australian employees by 1.75%.

Read this Fair Work Commission judgment to learn more about that decision.

Who does this wage increase affect?

The proposed 1.75% increase in the minimum wage applies to three “groups” of award winners. It was introduced gradually in three steps according to the group number. While the awards in Groups 1 and 2 implemented the increases in July and November 2020, respectively, the award winners in Group 3 will benefit from this third stage of the increase in the minimum wage from February 2021. As an employee, you benefit when your wages are awarded in awards such as the Commercial Sales Award, the Fast Food Industry Award, the Fitness Industry Award, the General Retail Industry Award, the Hospitality Industry (General) Award and the Restaurant Industry Award. The full list of the 27 awards can be found here.

How do I find out the minimum premium rate for my job?

If you are unsure what the minimum premium rate is for your job, please visit the Fair Work Ombudsman. You should use the Pay Calculator (PACT) which can answer a number of questions about the nature of your job. You should respond as truthfully and accurately as possible in order to calculate the correct minimum wage rates and allowances you are entitled to under this award.

After completing the questionnaire, PACT will inform you of your minimum wage.

What do employers have to do?

You should be aware of the obligation to adhere to increased minimum wage standards. You can notify your employees of the expected change in a written letter. Search Lawpath’s legal documents library for templates to find a letter similar to this one slated for a general raise.

This Employsure factsheet can help you better understand the changes needed. Read the article here to understand what employers should know about minimum wages in general.

What do employees have to do?

Employees should be wary of these expected changes in the minimum wage. The projected increase in the minimum wage should reportedly be reflected in payroll calculators shortly after Jan. 21.

Summary

As a result of the Fair Labor Commission’s latest annual wage review, the minimum wage will rise by 1.75% on February 1st. This applies to all employees in the context of Group 3 Awards. Both employers and employees should be aware of these changes. If minimum wage employees do not see a change in rate, they should consider taking formal steps as outlined above. For tailored assistance, please contact one of Lawpath’s attorneys via the Lawyer Marketplace.

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