The Fair Work Commission announced a minimum wage increase of 2.4% for 2016.
The Fair Work Commission announced a minimum wage increase of 2.4% for 2016. serggn

How minimum wage increase will affect Coast businesses

ON Tuesday the full bench of the Fair Work Commission determined to increase the national minimum wage by 2.4%.

In its decision the full bench noted that there was generally a positive outlook in terms of the Australian economy, and that whilst the increase should not result in "inflationary pressure" or impact on employment levels, the wage increase represented an opportunity to help those low-paid employees in Australia.

The effect of the increase will mean that the national minimum wage will increase by $15.80 per week, from the current amount of $656.90 to $672.70 per week (or $17.70 per hour).

The increase will take effect from July 1, 2016. The full bench also ruled the same increase of 2.4% will be applied to the minimum rates in each modern award.

The increase represents an amount nearly half of what was being advocated for by a number of employee representatives, including the ACTU.

However, many employer and industry groups are lamenting the extent of the increase, with many of these groups making submissions for an increase of around $8-11 a week.

Following the increase, the media is reporting a general feeling, particularly amongst the retail sector, that the increase of nearly $16 per week, will put further pressure on employers and that the hours offered to employees may need to decrease as a result.

There is also speculation in the media as to whether this increase will result in a further slow-down in available employment.

Reacting to the National Wage Increase

Employers should ensure that where the modern award rate is being paid, the increase is passed on to their award-covered employees from July 1, 2016.

It is also essential that employers review current pay rates for employees currently receiving over-award payments, or engaged under enterprise agreements, to ensure that they do not underpay their employees when compared against the revised award rates, and/or continue to comply with the remuneration provisions of the enterprise agreement.

Contact Aitken Legal with any inquiry about the wage increase as it affects modern awards or enterprise agreements.

Lisa Aitken is an accredited specialist in workplace relations law and the principal of Aitken Legal, a law firm specialising in employment law for employers.

The information in this column is intended as a guide only. Liability limited by a scheme approved under professional standards legislation.

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