The Fair Work Commission has ruled that the National Minimum Wage will increase by 5.2% to $21.38 per hour. This represents an increase of $40 per week.
They also ruled that modern award minimum rates will increase by 4.6%, subject to a minimum increase of $40 per week based on a 38-hour week for a full-time employee.
In practice, employees whose award rates are above $869.60 will receive a 4.6% pay increase, and employees whose wage rates are below $869.60 per week will receive a $40 per week pay increase.
These increases will apply from the first full pay period on or after 1 July 2022, with a few exceptions.
Awards Where Increases Delayed Until 1 October 2022
The Fair Work Commission acknowledged that exceptional circumstances existed in the aviation, tourism and hospitality sectors, which warranted delaying the increase for these sectors until 1 October 2022.
The affected awards are:
- Aircraft Cabin Crew Award
- Airline Operations – Ground Staff Award
- Air Pilots Award
- Airport Employees Award
- Airservices Australia Enterprise Award 2016
- Hospitality Industry (General) Award
- Registered and Licensed Clubs Award
- Restaurant Industry Award
- Marine Tourism and Charter Vessels Award
- Alpine Resorts Award
Changes to Superannuation from 1 July 2022
In addition to the minimum rages, two superannuation changes take effect from 1 July.
Removal of the $450 per month super guarantee threshold
From 1 July 2022, employers must make super guarantee contributions to their eligible employee’s super fund, regardless of how much the employee is paid.
There is no monthly minimum threshold above which employees must reach before super guarantee contributions are paid.
To check which of your employees are eligible for superannuation, check out the Super Guarantee Eligibility Tool from the ATO.
Increase in the Super Guarantee Rate to 10.5%
The super guarantee rate increases from 10% to 10.5% from 1 July 2022.
This percentage is legislated to increase by .5% each year until 2028. To check the scheduled super guarantee rates, visit the ATO website.
What Should You Do Now?
- The Fair Work Ombudsman is updating its pay tools and awards to reflect the new rates. These should be available by 1 July 2022.
- Check your payroll and accounting systems to reflect the new wage and superannuation guarantee entitlements.
- Review your employees to determine who will be impacted by the increases and adjust your wage budget.
- Review your employees on salaries or packages to ensure that their package still meets minimum wage conditions.
- Communicate with your employees about the changes.