Rise in pay rates announced

The Fair Work Commission (FWC) has granted a 5.2% wage increase to minimum pay from 1 July 2022.

The FWC has lifted the national minimum wage by $40 per week.

The new national minimum wage will be $812.60 per week (or $21.38 per hour).

The steep rise of 5.2% is much higher than the typical 3 to 3.5% increase in previous years but aims to meet the demands of soaring inflation. Last year’s rise of 2.5% only and 1.75% the year prior were much lower than the typical increase in light of the COVID-19 pandemic.

What increase is being applied to Modern Awards?

This year, the flow on effect to modern awards is less, with a 4.6% increase (but a minimum increase of $40 per week). This means workers on minimum award rates above $869.60 will get a 4.6% rise, while those earning less will receive a $40 increase.

This year, the start date of the increase will be staggered for the aviation, tourism and hospitality sectors until 1 October, 2022. All other industries are to receive their increase from 1 July, 2022.

Superannuation increases from 1 July

From 1 July, 2022, the super guarantee rate will rise from 10% to 10.5%.

Another important change in effect this year is the removal of the $450 per month threshold.

Employers need to ensure their payroll systems are updated and ready to reflect this increase. Employers can be subject to interest and penalties for underpayments of super contributions to their employees.

If you are unsure how the pay rises may affect your business or have any queries in relation to your super obligations, contact our experienced employment lawyers.