Government changes make it even harder for small business

In a recent announcement the Fair Work Commission has announced the highest ever single increase to the minimum wage, benefiting over a quarter of the nation’s workforce.

According to the decision made by the Fair Work Commission, and effective from the first full pay period on or after 1 July 2023, employees covered by modern awards will see a 5.75% rise in their minimum wage. Employees not covered by any specific awards will enjoy a rise of 8.6%, taking the hourly rate from $21.38 per hour, or $812.60 per week, to $23.23 per hour, or $882.80 per week. Additionally, casual employees will be entitled to a 25% loading on these amounts.

The rises come alongside headline inflation of 7%, as measured by the Consumer Price index (CPI) and another increase in interest rates, announced by the Reserve Bank on Tuesday the 6th of June, in an attempt to curb inflation.

Treasurer Jim Chalmers hailed the minimum wage rises as the biggest in history while helping 2.7 million Australian workers.

Meanwhile, business owners will need to take serious stock. Hiding in the detail of the Fair Work Commission’s announcement, it is important to note that the increases will also affect employers who may believe they are covered by enterprise agreements. Regardless of the agreement, according to law, employers cannot pay a base rate of pay lower than the applicable base rate of pay specified in a modern award.

It should also be noted, that as a general rule, employers who are already paying rates higher than the relevant minimum wage, may not be required to increase their rates of pay, as long as the new minimum wages are under, or equal to the rates currently being paid.

The Coffee Commune strongly advises members to seek professional advice to understand how this will specifically impact your business.



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