Increase to wages from 1 July 2022

Employees on the National Minimum Wage or covered by Awards will receive an increase to wages from 1 July 2022.

Following its Annual Wage Review 2021-2022, the Fair Work Commission (FWC) has made 2 announcements:

1. The National Minimum Wage will increase by $40 per week, which amounts to an increase of 5.2%.
2. Award minimum 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.

According to the Fair Work Commission, 2,659,400 (23 per cent) of employees had their pay set by awards, while 805,200 award-reliant employees were “low paid”. Up to 184,000 employees in total are paid the national minimum wage, including 88,900 award-reliant employees, 79,200 employees on individual agreements and 15,900 employees covered by enterprise agreements.

In announcing the increase to the National Minimum Wage – which exceeded the government’s suggested 5.1 per cent increase – the Commission noted the impact of a “sharp increase in the cost of living”.

The decision sets the pay of at least 2.7 million Australians on the national minimum or awards and will come into effect from 1 July.

Here’s a summary of key changes:

National Minimum Wage Increase

The National Minimum Wage applies to employees not covered by an award or registered agreement. From 1 July 2022, the National Minimum Wage will increase by $40 per week, which amounts to an increase of 5.2%.

The new National Minimum Wage will be $812.60 per week or $21.38 per hour.

Award minimum wage increase

The FWC has announced that 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 take 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.

If you are covered by an award, award increases happen in 2 stages:

1. Most awards will increase from the first full pay period on or after 1 July 2022.
2. For some awards in the aviation, hospitality and tourism industries, the increase will happen from 1 October 2022.

Need more details? Check out the FWC decision and summary.

While everyone’s busy at the end of a financial year, paying your employees correctly falls into the “must do” category, particularly if you want to avoid a knock on the door from a Fair Work Inspector. Bare Bones Consulting makes compliance with your Award and wages obligations simple…and who doesn’t love simple? Call us today or shoot us a message through our “Contact Us” page and we’ll get right back you. Now you can focus on something else!