money

What does the minimum wage increase from 1 July mean for employers?

This month saw a 3% increase to the national minimum wage and the modern award minimum wages, lifting it to $19.49 per hour. This is slightly below last year’s increase of 3.5%, due to a recent dip in the economy.

The 3% increase applies to any employee who gets their pay rate from:

  • the national minimum wage, or
  • a modern award.

All employers should ensure that employees who fall into one of these two categories are paid in accordance with the new minimum wage, which takes effect from their first full pay period on or after 1 July 2019.

If an employee receives an all-inclusive salary, beware that the increase may affect the lawfulness of that salary if it is no longer adequate to compensate them for their award entitlements.

This recent wage increase will also flow onto other areas such as loadings, penalties, allowances and overtime payments.

Note that the current casual loadings for modern awards and award/agreement free employees will remain at 25%.