2022 ANNUAL WAGE REVIEW DECISION
June 2022
In similar fashion to the last two years, there has been a lot of interest in the Annual Wage Review (AWR) as the country recovers from COVID-19, high inflation, and the war for talent with low unemployment. A perfect storm – this feels like yet another tornado for most employers, but it’s not easy for employees, particularly those in traditionally lower-paid jobs.
The AWR Panel handed down their decision on 15 June 2022; directly impacting 2.7 million Australian employees as it dictates the National Minimum Wage and minimum Award base rates of pay.
Unemployment is at a record low of 3.9%. You have to go all the way back to September 1974 for a lower unemployment rate – this was back when Sydney’s median house price was only about $20,000. If 3% is considered ‘full’ employment, then employers are either playing in a pool of 0.9% of the population or enticing workers from another employer.
It is worth showing below, as per the AWR decision summary, the vast change in key statistics in a mere 12 months:
As always, the wage rise was hotly contested. The Australian Council of Trade Unions (ACTU) proposed 5.5%; employer bodies were between 2.5% to 3.5%. An added piece of complexity was a late request by the newly elected Federal Government to make a submission post-election. This delayed the AWR outcome by a few days as the Commission made allowances in their timetable for this.
The AWR Panel determined a significant lift on the basis of a large increase in the cost of living, including basic staples that impact all, especially low-income households. The Panel determined that the increases proposed by employer groups were not high enough; more importantly, they would have resulted in employees going backwards in real terms. However, the Commission’s Panel did take into account the added increases for employers with the 0.5% increase in Superannuation from 1 July, as well as the removal of the $450 threshold for eligibility.
The outcome is summarised below:
This decision notes a larger increase for the National Minimum Wage to protect Australia’s lowest paid workers, while balancing this with inflationary pressures. The Commission has also observed that even with this percentage increase, some employees will still go backwards in real terms with inflation continuing to rise.
The Panel has determined these increases should occur in the first full pay period after 1 July, with the exception of 10 Awards where the industries are still in recovery post the pandemic.
These Awards are listed below, with a 1 October 2022 effective date:
· Aircraft Cabin Crew Award 2020
· Alpine Resorts Award 2020
· Airline Operations – Ground Staff Award 2020
· Hospitality Industry (General) Award 2020
· Air Pilots Award 2020
· Marine Tourism & Charter Vessels Award 2020
· Airport Employees Award 2020
· Registered and Licensed Clubs Award 2020
· Airservices Australia Enterprise Award 2016
· Restaurant Industry Award 2020
What does this mean for employee wages?
If you already pay above the newly defined Award rate or Minimum Wage, then as an employer, you only need to ensure you remain at or above it across all base rates, penalty rates and allowances, remembering that some Awards allow you to average hours (and hence pay) over cycles. If you pay an “flat” hourly rate or an annualised salary, make sure you regularly do a wash up to ensure your organisation is compliant.
Where to now?
Please reach out to HR Unplugged to discuss your business and how this decision might impact. Our focus is on sound, practical advice while at the same time making sure you remain compliant with the law. Employers will also need to consider staff attraction and retention issues.
Visit our website to learn more or contact us on Facebook / Instagram or contact Mel at mel@hrunplugged.com.au 0424 995 502 (Australia) or +64 22 603 1633 (NZ).