Authors: Amelia Dowey & Greg Robertson

On 15 June 2022, the Fair Work Commission handed down a decision that increased the national minimum wage by 5.2% for workers not covered by an award or registered agreement.

Similarly, modern award minimum wages have been increased by 4.6% subject to a minimum increase for adult award classifications of $40 per week.

In summary, as of 1 July 2022:

1. the national minimum wage will be $21.38 per hour or $812.60 per week for award/agreement-free workers; and
2. modern award minimum wage rates above $869.60 per week will receive a 4.6% adjustment, and wage rates below $869.60 per week will be adjusted by $40 per week (the increases in the hospitality, tourism and aviation industries will start 1 October 2022).

This decision was made in accordance with the legislative framework set by the Fair Work Act 2009 (Cth), which requires the Commission, constituted by an expert panel, to conduct and complete an annual wage review each financial year.

In reaching this decision, the Commission received submissions from unions, employers and employers’ organisations, the Australian Government, several state governments, and other entities and individuals.

In its submission to the Commission, the Australian Government noted that high and rising inflation and falling real wages were creating cost-of-living pressures, particularly for Australia’s low-paid workers, and submitted that the real wages of Australia’s low-paid workers should not go backwards.

The strengthening of the labour market and a sharp increase in the cost of living were cited by the Commission as significant economic changes between this year and last year weighing in favour of an increase in the national minimum wage and in modern award minimum wages. The Commission further observed that “this level of increase will protect the real value of the wages of the lowest-paid workers”.

This decision will affect up to 2.7 million workers as well as other employees whose employment is governed by enterprise agreements and individual pay setting arrangements.

For more information or if you require advice and assistance regarding the above, please contact our Harmers team on +61 2 9267 4322.