Institute of Certified Bookkeepers

Get ready for a 1.75% increase to base pay rates

The Fair Work Commission (FWC) has announced a 1.75% increase to minimum wages following its 2020 Annual Wage Review. The new National Minimum Wage (NMW) will be $753.80 per week or $19.84 per hour. The increase applies to base pay rates from the first full pay period starting on or after 1st July 2020. This constitutes an increase of $13.00 per week to the weekly rate or 35 cents per hour to the hourly rate.

Bookkeeping

The wage increase takes effect in a staged implementation. It applies to the first full pay period after the relevant start date.

Example: For those awards with a 1st July 2020 start date; if the employees are normally paid on the 3rd July for the pay period 29th June to 3rd July, this would be at the current rate. The increase would apply from the pay period commencing on 4th July.

Check all allowances, penalty rates and base rates of pay are increased appropriately in software as required.

Staged Implementation

The 1.75% increase will apply to minimum rates in Modern Awards in 3 stages from the first full pay period after the group date.

Group 1 Awards – from 1st July 2020

  • Frontline Heath Care & Social Assistance Workers
  • Teachers and Child Care
  • Other Essential Services

For a complete list of awards in Group 1 – Group 1

Group 2 Awards – from 1st November 2020

  • Construction
  • Manufacturing
  • A range of other industries

For a complete list of awards in Group 2 – Group 2

Group 3 Awards – from 1st February 2021

  • Accommodation and Food Services
  • Arts and Recreation Services
  • Aviation
  • Retail
  • Tourism

For a complete list of awards in Group 3 – Group 3

What do I need to do?

The FWC is working on updating their pay tools with the new rates and Group 1 Awards should be ready by 1st July 2020. Ensure your business owners are ready to pay the increase to their employees as at the appropriate date. Advise your clients the Group they fall into and what date the increase will take place.

Resource - Template letter to Businesses

Who does the increase apply to?

The change only applies to employees that derive their pay rates from the national minimum wage, a modern award or in some cases a registered agreement.

Most employees are covered by an award. If you're not sure which award applies to you or your client's employees, you can use Find my award on the Fair Work website.

Download useful ICB Minimum Wage Impact Analysis Tool available in xlsx format.

Parental Leave Pay

Parental Leave Pay is generally increased in line with the national minimum wage; however, we are waiting on updates on their website to confirm the increase to PPL from 1st July 2020.

References

  • 29th June 2020
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