From 1 July 2023 the national minimum wage and award rates will increase by 5.75%. Whilst this appears to be the first National Wage Case decision above 5% in its 116 year history, the impact on actual wages (and arguably inflation too) will be largely absorbed as most employees are already paid well above underlying minimum award levels. If your payroll references award rates, you should check and adjust your rates registers to comply and be ready for the first pay period in July. The awards will be updated and published with the new rates in the next fortnight.
The Commission also determined that the minium award wage link will now be to the C13 level rather than the C14 level. The key reasoning for the historic decision was explained in summary: “The current combination of economic circumstances, namely low unemployment, falling real wages and high inflation, is very unusual and presents a particular challenge in this year’s Review. A further challenge is the expected sharp slowdown in economic growth over the next year. In our consideration, we have placed significant weight on the impact of the current rate of inflation on the ability of modern award-reliant employees, especially the low paid, to meet their basic financial needs. Inflation is reducing the real value of these employees’ incomes and causing households financial stress. We have also taken into account the recent robustness of the labour market, and the fact that increases to modern award minimum wage rates will provide a disproportionate benefit to female workers and thus may contribute to reducing the aggregate gender pay gap across the workforce. Moderating factors we have taken into account include the forthcoming increase to the Superannuation Guarantee contributions rate, and the effect that an expected weakening in the labour market may have on casual employees and on particular industries. We have also had regard to the need to avoid entrenching high inflation expectations by taking a perceived wage indexation approach, and the recent weak performance in productivity growth.”
There is a hint of a suggestion that they expect such an increase will not be repeated.
For all the explanation go to: https://www.fwc.gov.au/hearings-decisions/major-cases/annual-wage-reviews/annual-wage-review-2022-23