Fair Work Commission Annual Wage Review 2018

Authored By Ms Carly Fordred

A 3.5% increase to base rates of pay

The Fair Work Commission has announced a 3.5% increase to minimum wages following its 2018 Annual Wage Review. The increase will apply to base rates of pay from the first full pay period starting on or after 1 July 2018.
 
The minimum wage has been increased by 3.5% to $719.20 per week or $18.93 per hour (an increase of 64 cents per hour on the minimum wage).
 
Apprentice and trainee rates will increase by proportionate amounts.
 
Allowances will be increased by further Fair Work Commission orders over the next few weeks.


 
Who does the increase apply to?

The change only applies to employees whose pay rates come from the national minimum wage, a modern award or, in some cases, a registered agreement. Most employees are covered by an award. If you are unsure which award applies to you or your employees you can contact us at AB Phillips on 1300 208 828.


 
What do you need to do?

Nothing just yet unless you need to make provision in your business’ budget for this increase.
 
The Fair Work Ombudsman is working on updating their pay tools with the new pay rates. This process usually takes about 2-3 weeks to update the pay rates for each award. Once these are published you will be able to apply the applicable rates.



What about over award payments?

For award based employees paid above award rates, the ‘absorption’ principle means that you do not have to increase above-award payments unless the new award minimum is higher than the employee’s current rate.  If this occurs, you must pay at least the new minimum.
 

My business has a registered agreement – what do I do?

Employers who have registered agreements in place (including pre-Fair Work Act 2009 agreements) will need to ensure that the base rate of pay in the agreement is at least equal to the new award minimum. This requirement only applies to the base rate of pay and does not apply to allowances, penalty rates or loadings.  
 
If your enterprise agreement has expired (that is, it has passed its nominal expiry date which may include a pre- Fair Work agreements), it remains in force until it is replaced by a new agreement or the Fair Work Commission terminates the agreement.

 

For more information, Members can access APSCo Australia's Modern Award Guides