On 2 June 2023, the Fair Work Commission (‘FWC’) handed down their annual national wage decision regarding increases to the national minimum wage (‘NMW’) and modern award pay rates. The FWC decided that effective from 1 July 2023, the NMW and modern award pay rates will increase by 5.75%. In addition, the FWC has ended the alignment between the NMW and the C14 classification (the lowest modern award minimum wage rate) and instead determined to as an interim step to align with the higher C13 classification, on the basis that the C14 classification is only transitional entry rate for new employees. The effect of this change is that the NMW, on this occasion, has actually increased by 8.6%.

Employers must ensure that from the first full pay period after 1 July 2023 their award-covered employee’s wages reflect the new pay increase of 5.75%. Some employers may already be paying above award rates. In those circumstances employers should ensure that any over award rates take into account the new increases to reflect the new minimum rates for each classification so that they are not inadvertently paying below the updated relevant award rate. The Fair Work Ombudsman will be adjusting their pay schedules from 1 July 2023 for each award to reflect the new pay increases.

The FWC considered a number of factors in their Annual Wage Review such as the current rate of inflation, the needs of low paid workers, relative living standards, workforce participation, and the national economy. Of significance for the FWC in their decision was the consideration of a high proportion of female workers covered by awards and minimum wages, and the nature of the casual workforce. The FWC will be addressing gender pay inequity issues in the coming year, in association with the 2023-24 Annual Wage Review.

If you need help with any award-related enquiries, please contact CER on 9189 5999 or enquiry@cer.catholic.org.au.