HR update: Minimum wage, award rate and superannuation increases

The Fair Work Commission has recently announced their decision regarding minimum wage and award rate increases which will come into effect on 1 July 2022. Here’s what you need to know:

National Minimum Wage 

The National Minimum Wage will increase by 5.2%, which amounts to $40 a week. The new National Minimum Wage will be $812.60 per week or $21.38 per hour.

 Award Rates

Minimum award wages will increase by 4.6%, which is subject to a minimum increase for award classifications of $40 per week and based on a 38-hour week for a full-time employee.

This means minimum award wages:

  • above $869.60 per week, will get a 4.6% increase
  • below $869.60 per week, will get a $40 increase.

When do the changes come into effect?

The new National Minimum Wage will apply from the first full pay period on or after 1 July 2022. This means if you have a weekly pay period that starts on Mondays, the new rates will apply from Monday 4 July 2022.

For some industries, a delayed operative date of 1 October 2022 is in place. To find out if this applies to your award, see the Fair Work Website:

https://www.fairwork.gov.au/newsroom/news/get-set-for-a-minimum-wage-increase.

Superannuation Changes

Changes to superannuation take effect from 1 July 2022. This includes:

  • removal of the $450 super guarantee threshold
  • increase in the super guarantee rate from 10% to 10.5%

What happens next?

If your business is paying over and above Award rates, it is likely that the award increases will not impact your employees, however it is advisable to understand these changes and ensure your business is meeting its wage obligations. 

In relation to the superannuation changes, make sure you update your payroll and accounting systems so that your employees are receiving the right amount of super, in line with the changes announced. 

If you are unsure of how these changes may impact your business, or if you have any questions, please feel free to get in touch.

Nick Hedges is the founder of Resolve HR, a Sydney-based HR consultancy specialising in providing workplace advice to managers and business owners. He recently published his first book, “Is Your Team Failing Or Kicking Goals – Take control of your people and their performance”. It is a practical Response to the most pressing HR challenges, which can be found at https://resolvehr.com.au/.

Disclaimer: The contents do not constitute legal advice and does not cater for individual circumstances.   The information contained herein is not intended to be a substitute for legal advice and should not be relied upon as such.

 

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