Fair Work Commission 2022 Minimum Wage Review

The Fair Work Commission has today, 15 June 2022, handed down the 2022 minimum wage review increasing the national minimum wage, and all award wages under $869.60 per week by a whopping 5.2%. Award wages in excess of $869.60 per week will be increased by 4.6%. The lead up to the decision has involved heighted media attention, having followed the newly elected Albanese government’s submission to the review that ‘real wages’ of low paid workers should not go backwards (proposing increases at the same rate of inflation which was 5.1%), and the recent 0.5% Reserve Bank interest rate hike.

The national minimum wage will increase from $20.33 to $21.38 per hour, or $812.60 per week. This constitutes an increase of $40 per week to the weekly rate or $1.05 per hour to the hourly rate. Minimum rates under modern awards will increase by the above, split percentages. These increases will be accompanied by the 1 July 2022 increase in superannuation contributions, to 10.5%.

The increases are considerably higher than the 2021 increase of 2.5%, with no increase over the past 10 years being higher than 3.5% back in 2018.

Implications For Employers

The consequences of this decision will be significant, particularly in the current economic climate. Employers must ensure that employees whose rates of pay are at or around minimum rates are increased accordingly to avoid heavy fines and or back pay obligations. For staff on annualised salaries or ‘all in’ hourly rates, employers will need to take steps to ensure that their annualised salaries or hourly rates remain high enough to meet their overall minimum award obligations moving forward (and that their workplace agreements correctly facilitate these arrangements). Particularly given the compounding effects of overtime and penalty rate entitlements. For those undertaking enterprise bargaining, employers can expect increased wage demands from unions and employee groups.

Employers with enterprise agreements or other arrangements should seek advice to ensure that the award wage increases do not ‘leap-frog’ the rates in these other instruments, resulting in underpayments to employees and exposing them to fines.


Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.  It should not be relied upon and specific legal advice always be sought before taking any action.

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