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Increase to National Minimum Wage for 2017-2018

The Fair Work Commission today announced the National Minimum Wage and Modern Award wages will increase by 3.3 percent for 2017/2018.

Employers must be ready to comply with the new National Minimum Wage and Modern Award wage rates (where applicable) from 1 July 2017.

Who does the decision affect?

For award-covered employees

  1. Where your business is paying sufficiently above the relevant Modern Award rate of pay to absorb the increase, you will not be required to make any immediate changes or to apply the increase.
  2. If your business pays employees on, or very close to, the minimum weekly wage in a Modern Award (or in some cases an Enterprise Agreement) you will need to increase your employee’s wages by 3.3 percent to ensure you are compliant.

Businesses should review employees’ salaries in the next few weeks to determine which of the above two categories they fall into.

For award-free employees

The decision also applies to non-award employees who are required to be paid at least the National Minimum Wage which will increase to $694.90 per week, or $18.29 per hour from 1 July 2017.

For employers negotiating a new Enterprise Agreement

These employers should consider the increase to ensure the rates that are negotiated are enough to pass the Better Off Overall Test.

When does the increase take effect?

The increase takes effect from the first full pay period after 1 July 2017.

For example: Sarah is an administration employee who receives the minimum wage rate under the Clerks – Private Sector Award 2010. Her employer’s fortnightly pay cycle finishes on 6 July 2017, therefore her wage increase under the Award will be applied to the pay cycle commencing 7 July 2017.

If you require assistance with determining the application, and implementation, of the National Minimum Wage increase, please contact our Workplace Relations Team.

This article was written by George Haros, Principal and Natasha Dessmann, Associate.