2021 ANNUAL WAGE REVIEW DECISION
It’s here! The latest Annual Wage Review which impacts 21% of Australian employees through setting the National Minimum Wage and minimum Award base rates of pay. After a 1.75% increase last year, with staggered roll-out dates, this year’s decision sees a hefty increase but continues with staggered starts depending upon your industry:
The Annual Wage Review Decision has designated there will be a staggered start date of the increase in the consideration of the impact of COVID-19 on the worse-hit industries, as listed below:
The adult base minimum wage will now lift to $20.33 per hour, from $19.84. Award base rate minimums will also rise 2.5%, with a similar lift across allowances, etc.
The economic bounce in the recovery phase of COVID-19 has been significant - the doom & gloom of previous months during the height of the pandemic has, generally speaking, not materialised. The housing market continues to boom, as does the construction market. Household spending is consistent and above the level of expectation.
Whilst many interest groups lobbied the Panel to be mindful of the ongoing nature of the recovery with struggling businesses and uncertainty, economic indicators were positive enough for the Annual Wage Review Panel to send up the flagpole a 2.5% increase to the Minimum Wage and base Award rates. They said:
“…There was a broad consensus in the submissions before us that the current performance in the economy has exceeded expectations and that the economic recovery was well underway.”
The Annual Wage Review Decision has designated there will be a staggered start date of the increase in the consideration of the impact of COVID-19 on the worse-hit industries, as listed below:
What does this mean for businesses?
If you already pay above the Award rate (or Minimum Wage), then the next steps are as follows:
Review the base rate (and associated penalties & allowances) for all Award and Minimum Wage employees to ensure you are meeting the prescribed minimum by the effective date;
Make any necessary changes by the first pay period that is relevant to your industry’s Award, noting you may have more than one Award that applies to your workforce;
If you pay a combined hourly rate (sometimes known as an “all-up” hourly rate) or pay an annualised salary, you need to ensure your calculations demonstrate a pay rate when broken down into a base rate plus, that is equal to, or better than, the Award.
We think the Annual Wage Review Panel have been a bit rich in their increase this year. Their confident decision that the economy is guns-a-blazing could come crashing down at the first corner, even taking into account the real appreciation of the poverty line and the need for employees to keep in line with, or ahead of, inflation.
Sustained economic improvements without the constant blip of lockdowns or the added onus on employers around casual employee definition changes, means the next 12 months could get quite rocky.
Where to now?
Please reach out to our friendly HR Unplugged team to discuss your situation, and the different scenarios you may be facing. Some sound, practical advice from us, can save you a lot of heartache in the future.
The staggered start to the wage increases also means more complexity – as always, ignorance is not an excuse. Let us make it clear for you so you stay on the right side of the legislation.
Visit our website to learn more, or contact us on Facebook / Instagram or contact Mel at mel@hrunplugged.com.au or via WhatsApp on 0424 995 502.