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Fair Work Wage Increase – Time to Review!

Fair Work Wage Increase – Time to Review your Rates of Pay, Employment Contracts and Enterprise Agreements

The Fair Work Commission (FWC) has conducted its annual review of the minimum wage for award and non-award employees and has ruled that the following will apply from the first full pay period on or after 1 July 2015:

• A 2.5% increase to all modern award wage rates; and

• An increase to the national minimum wage for award/agreement free employees to $656.90 per week or $17.29 per hour.

What Should Employers Do?

Employers should now actively review employees’ employment contracts and any enterprise agreements to ensure that the rates of pay (including annualised salaries) are at least equal to the updated modern award rates, or if the employees are award free, not less than the minimum wage rates.

What are the Risks to Employers?

Employers’ face a number of risks should they pay employees less than the modern award rates and/or the minimum wage, such as:

• Underpayment claims by employees going back 6 years.

• Investigations and prosecution by the FW Ombudsman.

• Negative media publication.

• Low employee moral.

Best Practice

Employers should also consider undertaking a broader review of their employment contracts to:

• Ensure award and legal compliance.

• Consider the inclusion of an ‘offsetting’ clause, in cases where employees are paid above award rates.

• Take into account any business changes that have may have occurred during the year.

• Consider introducing Award Flexibility Agreements to overcome inflexible hours of work and overtime penalty rate clauses.

McPherson Lawyers can review and advise on of your employment contracts.  

Call Lou McPherson on 4952 9554 for further information on how we can help.