The Fair Work Commission's Expert Panel today announced an increase to minimum wages following the Annual Wage Review 2023-24.
Last year, the Panel significantly increased minimum award wages and the National Minimum Wage by 5.75% and 8.6% respectively, predominantly as a result of high inflation and increased cost of living pressures.
This year, the Panel determined to increase the national minimum wage and the minimum rates of pay in modern awards by 3.75%. This change will take effect from the first full pay period on or after 1 July 2024.
The Panel cited current cost of living pressures on low-income households and stagnating wages as primary considerations in determining to increase minimum wages.
The Panel stated:
"The increase of 3.75 per cent which we have determined is broadly in line with forecast wages growth across the economy in 2024 and will make only a modest contribution to the total amount of wages growth in 2024. We consider therefore that this increase is consistent with the forecast return of the inflation rate to below 3 per cent in 2025."
Moderating factors in the Panel's decision included the imminent increase to the superannuation guarantee rate from 11% to 11.5% from 1 July 2024, flat labour productivity growth in the last 4 years, the decrease in inflation compared to last year's Annual Wage Review and the cost-of-living measures (including Stage 3 tax cuts) to be implemented soon by the Commonwealth Government following the 2024 Budget.
The Panel also foreshadowed the establishment of proceedings initiated by the Fair Work Commission to examine and address gender undervaluation for early childhood education and care workers, disability home care workers and other social and community services workers, dental assistants, medical technicians, psychologists, other health professionals and pharmacists.
What does this mean for employers?
The Panel's decision will affect millions of Australian workers, including those who have their rate of pay set under the National Minimum Wage, a modern award or in some cases, an enterprise agreement.
Employers must reflect these increases from the first full pay period on or after 1 July 2024. Failure to implement these increases will result in underpayments which could lead to legal action including the imposition of financial penalties for breaches of the Fair Work Act 2009.
You can read more about the Annual Wage Review 2023-24 at these links:
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