New minimum wage announced - yearly wage bill p by at least $2.2 billion

Published:

The Fair Work Commission delivered its annual wage review today. This decision will have a significant impact on all businesses and industries and over 2.2 million employees who are paid at the National Minimum Wage or minimum Modern Award rates.

From the first full pay period commencing on or after 1 July 2019: 

  • All Modern Award rates will increase by 3 per cent (with weekly wages rounded to the nearest $0.10)
  • The National Minimum Wage will increase by 3 per cent to $19.49 per hour (and an extra $21.60 per week for a full-time employee), an increase of $0.56 per hour for the hourly rate, and $740.80 per week

The Commission's decision only confirms the basic increase in minimum rates while confirmation of the specific rates (including new allowance rates) for each individual Award have not yet been released. These will be released before 1 July 2019. 

While there are different minimum wages for different job types and awards, each of these comes from a Government legislated Minimum Wage, which all businesses in Australia must abide by. 

ARE JOBS AT RISK? 

The new minimum wage announcement typically spurs a frenzy of cost-cutting advice, and many employers will be reconsidering their staffing needs. Founder and managing director of workplace relations firm Employsure, Ed Mallett says, "Our small business clients tell us that there's a lot of pressure, and that is where we can help SMEs prepare and understand what they need to do; to deal with these changes." 

SMEs may initially face an overall increase in the cost of doing business due to higher wage costs and competition for manpower from the larger firms. "Some of our small business clients are considering reducing costs, increasing prices, reducing staff or reducing operating hours...or a mixed approach to maintain current profitability," he said, pointing out that today's decision, "Has a disproportionate impact on small business, because they have fewer variables that they can change to maintain profitability - can they really just add the extra staff cost to the price of your coffee, for example? Would customers accept that?" 

The yearly wage bill for Australian businesses could increase up to $2.2 billion and, "Most SMEs won't be charging customers 3 percent extra from 1 July; but will need to come up with an extra $21.60 per week per employee, and many simply need support."

DID LABOR'S 'WAR ON WAGES' CAMPAIGN IMPACT THE FWC DECISION? 

Labor's 2019 election campaign argued the laws of supply and demand in the labour market were broken; that the economy forces were not able to deliver appropriate wage rises for workers. 

In reaching their decision, the FWC said they considered economic standards, GDP growth, living standards, inflation, and the strong labour market. 

While the dialogue on wages can be highly polarising, small business advocates claimed SMEs are already reducing the number of employees to keep up the rising costs of business. "Wages have been part of the national debate for the past few months and it's important to strike a balance between employees and employers. Wages will always change and that is the just the nature of the economy, but that doesn't mean businesses won't struggle."

WHAT HAPPENS NOW?

If you pay your staff at Award level, the increase to minimum rates take effect from the first full pay period commencing on or after 1 July 2019.

Mallett advises, "If you already pay above Award rates, you may not be required to increase your employees' wages, provided the rates you pay are above the increased minimum Award rates (and you are not required to increase employees' wages under their contracts of employment or applicable enterprise agreement)," he said.

"In just over a month, businesses will need to absorb these changes and will be expected to be compliant. To help, we are providing over 24,000 small businesses with specific information and wage schedules according to their industry; as final rates are released by the Fair Work Commission."

 
Business Business & Economy
Social:   

Privately Submitted Article or Event :
See Above Article or Event for Address, Sunshine Coast Wide
Privately Submitted Article or Event
Showing 10+ recent articles for this business
Coles launches flypay in partnership with flybuys 29 May 2020 | The new payment method speeds up the online checkout process for customers, who will no longer need to enter their payment and delivery information separately when shopping with flypay-enabled retailers. Once... More information...
Don't risk oral cancer through tobacco use 29 May 2020 | For World No Tobacco Day this Sunday (May 31) the Australian Dental Association (ADA) is sending an alert to tobacco users of all ages – with oral cancer a known risk of tobacco use, it's never too late to... More information...
A creative focus on mental health in rural Australia - through song! 28 May 2020 | The National Rural Health Alliance and singer-songwriter Josh Arnold are proud to launch 'Build 'em up!', a song written in collaboration with Friends of the Alliance and people in rural and remote communities... More information...
Indigenous communities to Share a Yarn with elite athletes 27 May 2020 | Olympic race-walker Beki Smith and Western Sydney Wanderers goalkeeper Jada Whyman are amongst 13 current and former elite athletes who have joined together to 'Share a Yarn' with remote Indigenous communities... More information...
Additional flu vaccine supplies rolling out across Australia 27 May 2020 | Seqirus Australia is pleased to confirm that additional supplies of flu vaccinations have started to roll out across the country – with around one million doses expected to be rolled out in the next three weeks... More information...
Art World Scrambles to Keep up with Online Art Disrupter 22 May 2020 | With many art auction houses removing their paintings from the walls in the midst of plummeting sales across the Globe, an Australian online auction company is disrupting the market listing their biggest multi-... More information...
Host a #LocalNightIn to save our local restaurants 19 May 2020 | Restrictions necessary to reduce the spread of COVID-19 have seen many of our most-loved local restaurants, cafes, pubs and clubs doing it extremely tough. The response to the pandemic has led to stand-downs... More information...
How do humans and the environment interact? 25 May 2020 | "How humans and the environment interact" is the theme of the 7th Rural and Remote Health Scientific Symposium's virtual pre-Symposium session, which is now fully available. It includes a Q&A session with the... More information...
How is COVID-19 changing democracy 20 May 2020 | UNSW researcher Dr Carolien van Ham says authoritarian regimes are using the pandemic as a way to strengthen their grip on power. More information...
Rural health journal shines a light on physical and mental health 20 May 2020 | What impact do bushfires, COVID-19 and climate change have on rural health? More information...


comments powered by Disqus

All articles submitted by third parties or written by My Sunshine Coast come under our Disclaimer / Terms of Service