Minimum wage rate increase taking effect 1 July 2024

Minimum wage rates to change

From 1 July 2024, the National Minimum Wage will increase from $23.23 per hour ($882.80 per week) to $24.10 per hour ($915.90 per week) for agreement and award-free employees, representing an increase of 3.75%. This annual wage review was determined by, the 'Expert Panel' of Fair Work Commission members with relevant expertise. 

The minimum rates of pay specified in all 121 modern awards will also receive a 3.75% increase, impacting not only normal rates of pay but also penalty and overtime rates payable to award-covered employees.

Reasoning

The Expert Panel was required to take into account specific considerations including the performance of the national economy, the need to achieve gender equality, the promotion of social inclusion through increased workforce participation, and the relative living standards and the needs of the low paid. These considerations are mandated by the Fair Work Act 2009 (Cth). Submissions in relation to these matters were made by various stakeholders, including the Australian Chamber of Commerce and Industry, the Australian Council of Trade Unions, the Australian Industry Group, the Council of Small Business Organisations, and the Australian Federal and State governments.

One of the Expert Panel's primary considerations was the cost-of-living pressures, which modern award and National Minimum Wage-reliant employees are expected to continue to experience (despite reductions to inflation) and are particularly vulnerable to. However, the Expert Panel did not consider it appropriate to increase minimum wages by an amount significantly above the inflation rate (currently 3.6%, but forecast to return to below 3% in 2025). It was also noted that the labour market and business profit growth overall remain generally strong (with some industry exceptions), that modern award and National Minimum Wage-reliant employees will receive the benefit of the Stage 3 tax cuts and cost-of-living measures outlined in the Budget, and that the Superannuation Guarantee contribution will increase from 11% to 11.5% on 1 July 2024.

A copy of the Fair Work Commission's summary of the Expert Panel's decision is available here, and the full text of the decision is available here. The decision is expected to impact the wages of about a quarter of all Australian employees - of those, almost half are casual employees, most work part-time hours and most are women.

For Employers

Ahead of 1 July 2024, employers will need to assess the rates of pay of any employees paid in accordance with the National Minimum Wage or modern award minimum rates of pay.

Employers with modern award-covered employees who are paid above the minimum rates of pay specified by the applicable award - in order to satisfy any award entitlements that may arise, you need to check and consider if any adjustments are necessary to ensure a sufficient buffer is maintained above the specified minimum rates of pay. The Fair Work Commission lists the award pay rates on their website.

Employers are also reminded that a 25% loading remains payable to casual employees in addition to their applicable rate of pay, including award-free employees, in lieu of an entitlement to paid leave.

Superannuation to increase to 11.5%

Superannuation will also increase from 1 July 2024 to 11.5%. Then again to 12% in 2025/2026.