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The Fair Work Commission has approved a 2.6% increase to Modern Award adult minimum wages resulting in Australia's lowest paid workers getting a rise of $15.80 per week from 1st July.

The Australian Chamber of Commerce and Industry (ACCI) had sought an increase of $5.80 per week, while the Australian Industry Group had called for a $12 rise. By contrast, nnions has sought a $30 per week increase in the minimum wage.

ACCI Chief Executive Peter Anderson says the minimum wage rise will have a major impact on small business, stating "$1.5 billion of increased wages (now) have to be funded by Australia's small and medium business community.

"Job security will be affected, but (businesses) will also seek to try to reduce working hours in order to maintain employment but also have a containable labour cost structure.

"That's not ideal for the business, it's not ideal for customers, it's not ideal for the workers themselves."

The change will see the minimum adult weekly wage will increase by $15.80 per week ($0.41 per hour) to $622.20 per week ($16.37 per hour) from the first full pay period on or after 1st July 2013.

All modern award adult base rates will increase by 2.6% from the first full pay period on or after 1st July 2013. Transitional wages and penalties will also progress to the next transitional phase from 1st July 2013 in moving to the modern award rates.

Weekly wages will be rounded to the nearest 10 cents.

This is the fourth annual minimum wage review to be conducted by Fair Work Commission (FWC) and its predecessor Fair Work Australia.

Further advice on the changes from the Australian Federation of Employers & Industries (AFEI)

Modern award minimum wages for juniors and training employees

Under most modern awards, junior employees and employees to whom training arrangements apply receive a percentage of the minimum award rate of pay. As a consequence, these employees will also receive a proportion of the increase in minimum rates.

Employees to whom a training arrangement applies and who are covered by the National Training Wage Schedule (NTWS) within a modern award will have their rates adjusted by 2.6%

Award/agreement free juniors and trainees

Minimum wages for juniors who are award and/or agreement free are to be based on the junior wage percentages in the Miscellaneous Award 2010 applied to the national minimum wage.

For trainees who are award and/or agreement free, the provisions of the Miscellaneous Award 2010 as adjusted will apply as the special national minimum wage for these employees. The apprentice provisions in that award and the provisions of the National Training Wage Schedule will be incorporated into the national minimum wage order. The order will also provide that adult apprentices should not receive less than the national minimum wage.

Employees with a disability

The national minimum wage order will contain two special national minimum wages for award/agreement free employees with a disability:

• For employees with a disability whose productivity is not affected, a minimum wage of $622.20 per week or $16.37 per hour based on a 38-hour week.

• Employees whose productivity is affected will be paid in accordance with an assessment under the supported wage system, subject to the minimum payment fixed under the Supported Wage System Schedule (SWSS). FWC will announce the minimum weekly payment under the SWSS when the national minimum wage order is made.

Transitional instruments

FWC have again decided to vary all transitional instruments that remain in operation, including Division 2B State Enterprise Awards, in accordance with the 2.6% increase to modern award minimum wage rates.

Transitional instruments generally only apply where an employee does not have a modern award covering them.

Casual loadings

The minimum casual loading for award/agreement free employees has been increased by 1% from 23% to 24% as part of transitioning to 25%.

Allowances

In the modern award system, work related allowances are linked to a percentage of the standard rate as defined in the modern award. Accordingly, the increase to wage rates (including the standard rate in the award) will flow on to work related allowances.

Modern awards provide that an increase to expense related allowances must be considered at the time of an adjustment to the standard rate in the award. To determine the extent of any increase, the relevant adjustment factor is the percentage movement in the applicable index figure most recently published by the Australian Bureau of Statistics since the allowance was last adjusted. For most expense related allowances, the relevant adjustment period will be from 31st March 2012 to 31st March 2013. FWC will publish draft determinations concerning increases to expense related allowances shortly.

Modern Award Transitional Provisions

While an increase of 2.6% applies to the minimum weekly rates in modern awards, the actual increase may vary due to the transitional provisions in a modern award.

The fourth phase of the transition provisions will commence from the first full pay period on or after 1 July 2013. AFEI will publish award specific information and wage rate schedules concerning the impact of the transition provisions once FWC finalises its minimum wage order.

For more information go to www.fairwork.gov.au/Pages/default.aspx 

27th May 2013 - ADVERSE ACTION CLAIMS ON THE RISE

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