More than 2 million Australian workers on minimum wages will receive a pay rise after the Fair Work Commission (FWC) increased the minimum wage by 3.5%. The new national minimum wage will be $719.20 per week or $18.93 per hour. This constitutes an increase of $24.30 per week to the weekly rate or 64 cents per hour to the hourly rate. The wage increase officially came into operation on 1 July 2018.
Employers should now carefully review their wage arrangements and implement the necessary wage increases to ensure minimum wage rates are comparable with the underpinning modern award. During this process, you should also keep in mind the changes to penalty rates, with the next phase of the lowered penalty rates transition taking effect from 1 July 2018.
How much is the increase?
3.5% increase to minimum wages
Who does the increase apply to?
- the national minimum wage
- a modern award.
The national minimum wage applies to employees who aren’t covered by an award or agreement. The increase doesn’t affect employees who already get paid more than the new minimum wage.
For employees covered by an award, award rates will increase by 3.5%. If you’re not sure which award applies, you can use the Find My Award page here.
If you’re covered by a registered agreement, you should check it to see whether this increase affects you. For more information, visit the FWC Annual Wage Review and registered agreements.
What do I need to do?
Nothing for now. The FWC is working on updating their pay tools with the new pay rates. To be kept up to date you can subscribe to email updates here to be notified when the new rates are available in the FWC pay tools.
What happens next?
The FWC will issue draft determinations and orders about how this decision affects modern awards. It will then update the pay rates in each award. It usually takes the FWC a few weeks to do this. Once they make these changes, they will update their pay tools with the new rates.
Is anything else changing?
Some penalty rates are changing too. There will be further changes to Sunday penalty rates in some hospitality and retail awards from 1 July 2018 (following a decision from the Fair Work Commission last year). For more information visit the FWC Penalty rates changes 2017 page for more information about what the changes are, who they affect and how they’re being implemented here.