Yesterday, 2 June 2015, the Minimum Wage Panel of the Fair Work Commission (FWC) handed down its Minimum Wage Ruling. The FWC has awarded an increase of 2.5% to all adult full time weekly rates in the Modern Awards from the first pay period commencing (ppc) on or after 1 July 2015. Proportionate increases will flow to part time and casual workers.
The 2.5% increase results in the National Minimum Wage (NMW) increasing to $656.90 per week (or $17.29 per hour). Casual workers who remain ‘award free’ will have the casual minimum rate increased to $21.61 per hour from ppc 1 July 2015.
It is important for employers to remember that it will not result in the same dollar value increase for each classification level – higher award rates will receive a higher increase in terms of the dollar amount flowed-on. For example, a 2.5% increase in the NMW is a $16.00 per week increase whereas a 2.5% increase in the standard trade-qualified (C10) rate, currently $746.20 per week, equates to an increase of $18.70 per week.
Allowances contained in each Modern Award, which are calculated as a percentage of the ‘standard rate’, will of course increase following the 2.5% per week increase to the ‘standard rate’ they are calculated from. Furthermore, expense-related allowances, specific to each Modern Award, will increase as necessary subject to the formal determinations issued by the FWC.