FWC 2018 Minimum Wage Review

The Fair Work Commission has today, 1 June 2018, handed down the 2018 minimum wage review which will increase award wages across the board by 3.5%. The national minimum award wage will increase to $18.93 per hour from $18.29, and the percentage increases will be carried over into minimum award rates. The award and minimum wage increase will come into effect from 1 July 2018.

Today’s increase has continued to the upward tend of increasingly high percentage wage increases in recent years – it is 0.2% up from last year’s 3.3% increase, and considerably up from 2016 and 2015 increases of 2.4% and 2.5% respectively.

Implications For Employers

Employers must ensure that employees whose rates of pay are at or around minimum rates be increased accordingly to avoid heavy fines and or back pay obligations. For staff on annualised salaries or ‘all in’ hourly rates, employers should check 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).

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