FibreHR Blog

We share some of our recruitment strategies in our blog. FibreHR, your people are our business.

Minimum Wage increase

Lisa Spiden - Friday, June 06, 2014
The Fair Work Commission has announced a 3.0% increase in the minimum wage in its annual review. Effective from July 1 2014, the national minimum wage will be $640.90 per week for employees who are not on modern awards. This is an increase of $18.70 per week, or 50c per hour.

According to the commission, the decision was based on a number of factors, including the anticipated positive outlook for the Australian economy, social and lifestyle considerations of lower paid employees, and the increase in the cost of living. The Commission noted that while ‘real earnings’ have typically increased in the past decade, inequality in earnings was also increasing and a number of factors had culminated in there being a reduction in the relative living standards of award-reliant workers. 

In making its decision, the Commission has again said that the introduction of an increased superannuation guarantee rate was a moderating factor in considering the adjustment that should be made to minimum wages. However, it refused to take into account any improvements in living standards that could arise as a result of the government’s proposed abolition of the carbon price, saying this approach invited it to ‘speculate on the outcome of an uncertain political process’. For the same reason, it did not take into account proposed changes to the tax-transfer system announced in the latest federal budget.

New wage details for those employees who are covered by modern awards will also be available from July 1. As an employer, there are a number of steps you should take to prepare your business for the changes, and make sure you are in compliance with the new award increases:
  1. Review your budget to prepare for the increase from July 1.
  2. Make sure you receive the updated award information from Fair Work Australia so you can check that your employees are being paid the correct amounts for the relevant awards.
  3. Update your payroll systems so they are ready to go for July 1.
  4. Don’t forget there is a rise in superannuation payments effective from July. This will take the employer contribution from 9.25% to 9.50%.
The Commission also confirmed an increase in the casual loading for award/agreement free employees to 25% (which aligns with the casual loadings applicable in most modern awards).

Superannuation Increases effective 1 July 2014

Lisa Spiden - Friday, May 23, 2014
The superannuation guarantee is due to increase from the current 9.25% to 9.5% on 1 July 2014. It will remain at that level for four years before increasing 0.5% each year until reaching its peak of 12% in July 2022. 

Additionally, last week’s budget revealed changes that will affect superannuation contributions increases by delaying the superannuation guarantee to 12% by three years.  

The new incremental increases are laid out in the table below for your information:

Financial year Rate
July 2014-June 2015 9.5%
July 2015-June 2016 9.5%
July 2016-June 2017 9.5%
July 2017-June 2018 9.5%
July 2018-June 2019 10.0%
July 2019-June 2020 10.5%
July 2020-June 2021 11.0%
July 2021-June 2022 11.5%
July 2022-June 2023 12.0%

Click here to read the Cornwall Stodart update on superannuation updates

If you require any further information or assistance with updating your employment contracts please do not hesitate to get in touch.