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Annual Wage Review Decision 2021

Minimum wage to increase by 2.5%.
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Annual Wage Review Decision 2021

Annual Wage Review Decision 2021

17 June 2021

Yesterday afternoon, the Expert Panel for annual wage reviews constituted by the Fair Work Commission (the Commission) handed down its annual wage review decision for 2021 to increase the minimum wage by 2.5%. The decision applies to all employees covered by modern awards, enterprise awards, as well as award free employees.

The Commission received submissions from parties representing the interests of employers and employees, the Australian Government, most state governments and other bodies. The Commission states there was a broad consensus in the submissions that Australia’s economic performance exceeded expectations and its ongoing recovery is well underway. The decision stated that only ‘exceptional circumstances’ will justify a variation determination to delay the operative date, 1 July in the next financial year, of the annual wage increase. The matters that were considered relevant to the assessment of exceptional circumstances included relevant industry specific data, the period of time between successive annual wage review increases and the direct impacts of COVID-19 restrictions imposed to specific industry sectors.


Summary of Decision

  • Minimum wages in most of the modern awards will be increased by 2.5% from the start of the first full pay period on or after (ffppooa) 1 July 2021.
  • Minimum wages in respect of the General Retail Industry Award 2020 will be increased by 2.5% from the start of the ffppooa 1 September 2021.
  • Minimum wages in the modern awards in the following categories will be increased by 2.5% from the start of the ffppooa 1 November 2021:
    • Accommodation and food services sector (excluding the Fast Food Industry Award 2010)  
    • Aviation and Tourism Awards
    • Arts and recreation services sectors (excluding the Horse and Greyhound Training Award 2020)
    • Retail trade sector directly impacted by COVID-19 restrictions imposed
  • The 2.5% increase will also apply to the national minimum wage, increasing it by $18.80 to $772.60 per week, or $20.33 per hour from the start of the ffppooa 1 July 2021.
  • The national minimum wages for juniors, employees under training arrangements, and employees with a disability will also increase by 2.5% in accordingly.

 

Key Features of the Decision

Award-covered employees

Adult minimum wages
The minimum rates of pay for adult employees covered by a modern award are to be increased by 2.5% from the start of the ffppooa 1 July 2021, 1 September 2021 or 1 November 2021 as mentioned. Weekly wages will be rounded to the nearest $0.10.

Juniors, apprentices, trainees and piece workers
Most junior and apprentice rates are expressed as a percentage of a nominated adult rate and so the 2.5% increase will also flow through to these employees’ wages.

National Training Wages for trainees will also be increased by 2.5% in accordance with the operative dates as mentioned.

Piece rates will increase in accordance with the relevant provisions in the modern award.

Employees with a disability
Most modern awards contain a supported wage system for employees with a disability. These employees are paid a percentage of the relevant adult wage, based on their assessed capacity. As a result, the 2.5% increase will also flow through to these employees. There is a minimum weekly payment (currently $89) which will also be increased. The new minimum weekly payment was not determined today but is expected to be announced before 1 July 2021. Members will be advised when further information is available.

Award/agreement-free employees

Adult minimum wages
Award/agreement-free adult employees are covered by the national minimum wage. This will be increased by $18.80 to $772.60 per week, or $20.33 per hour from the start of the ffppooa 1 July 2021.

Casual award/agreement free employees are also covered by a default casual loading which remains at 25%.

Special national minimum wages for award/agreement free junior employees
Previous wage reviews have established a special minimum wage for award/agreement free junior employees. These employees receive a percentage of the national minimum wage determined by the junior wage scale in the Miscellaneous Award 2020.

This provision will continue to apply to relevant employees and their minimum wages will increase accordingly from the start of the ffppooa 1 July 2021.

Special national minimum wages for award/agreement free employees to whom training arrangements apply
Previous wage reviews have established a special minimum wage for award/agreement free trainees and apprentices.

Award/agreement-free apprentices receive a percentage of the national minimum wage determined by the apprentice scale in the Miscellaneous Award 2020. Award/agreement free adult apprentices must not receive less than the full national minimum wage for adults.

Award/agreement free trainees must be paid in accordance with the National Training Wage, as found in Schedule E of the Miscellaneous Award 2020.

These provisions will continue to apply to relevant employees and minimum wages will increase accordingly.

Special national minimum wages for award/agreement free employees with a disability
The minimum rate of pay for award/agreement free employees with a disability that does not affect their work has also been increased by 2.5%. The adult minimum wage for these employees will rise to $772.60 per week, with juniors paid a percentage of this based on the scale in the Miscellaneous Award 2020.

Award/agreement free employees with a disability that affects their work are paid a percentage of this amount, based on their assessed productive capacity. There is a minimum weekly payment for these employees (currently $89) which will also be increased. The new minimum weekly payment was not determined today but is expected to be announced before 1 July 2021. Members will be advised when further information is available.

To view the summary of the decision please click here.
To view the full decision please click here.


Further Information

Members who are subscribed to ‘2010’ Modern Awards online will receive updates on changes to existing pay and allowance summaries outlining the impact of the wage review on the awards that apply to their business. These will be made available in due course. It should be noted that the new ‘2020’ Modern Awards have summaries of pay rates and allowances in the Schedules contained within the awards.

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