LEGAL UPDATE

Increases to Minimum Wages and Other Important Changes From 1 July 2024

3 June 2024

Authors: Paul Lorraine & Stella Magoulias

Minimum wage increase

The Fair Work Commission handed down its annual wage review decision on .3 June 2024.

From 1 July 2024, Australia’s National Minimum Wage for adult employees will increase by 3.75%, from $882.80 per 38-hour week (or $23.23 per hour) to $915.90 per 38-hour week (or $24.10 per hour).

Similarly, minimum rates under modern awards will also increase by 3.75% on 1 July 2024.

The National Minimum Wage applies to all award and agreement free employees who are not junior employees.

For junior employees who are award and enterprise agreement-free, the percentage scale set out in the Miscellaneous Award 2020 is applied to the national minimum wage to determine the applicable minimum rate of pay.

The minimum casual loading for award and enterprise agreement-free employees remains at 25%.

Superannuation

Employer superannuation contributions under Australian superannuation guarantee legislation increase from 11% to 11.5% from 1 July 2024. Next year they will increase to 12%.

Unfair Dismissal

The income and compensation caps for unfair dismissal claims under the Fair Work Act increase from 1 July 2024.

The high income threshold for unfair dismissal applications increases to $175,000, and the maximum compensation increases to $87,500.

Employees who are not covered by an award or an enterprise agreement are unable to claim unfair dismissal if they earn more than the high income threshold.

Paid Parental Leave

Eligible working parents can receive an extra two weeks of paid parental leave (22 in total). The total will increase again by two weeks in 2025 and 2026.

Key Action Points for HR and Legal Counsel:
While not all wages will rise as a result of the National Minimum Wage increase, employers should review their wage rates to avoid any risk of accidental underpayment on 1 July. The penalties for underpaying wages can be severe.

The National Minimum Wage Decision and Statement 2024 can be viewed on the Fair Work Commission’s website via this link: Decisions & statements for the Annual Wage Review 2023–24 | Fair Work Commission (fwc.gov.au).

Further changes will come into effect in August 2024.

If you have any questions about wage rates, awards, agreements, or employee entitlements, please contact our Harmers legal team at +61 2 9267 4322 for further information or assistance.

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