2021 Minimum Wage Increase

The End of the Financial year is fast approaching and from 1 July 2021 there will be some changes to the minimum wage!

The Fair Work Commission has announced a 2.5% increase to minimum wage.  There is also a 0.5% superannuation increase which comes into effect from 1 July so employee’s need to be budgeting for a 3% increase overall.

Like last year, the minimum wage increase for 2021/22 has been staggered into three stages. Industry sectors which are still adversely affected by the COVID-19 pandemic will have the increases delayed.

The new national minimum wage will be $772.60 per week or $20.33 per hour. This constitutes an increase of $18.80 per week to the weekly rate, or 49 cents per hour to the hourly rate. It is the first time the minimum adult wage is above $20 per hour.

Unions are disappointed in the increase as they had been calling for a 3.5% increase. They have also expressed their disappointment that some employee’s will have to wait longer to get the increase.

Timing of the increase.  Most awards (Group 1) will increase from the first full pay period on or after 1 July 2021.  Industries that have had the increase delayed are:

  • Group 2 – General Retail Industry Award increases come into effect from 1 September 21
  • Group 3 – The modern awards in this group cover workers in other industries that are still feeling the impacts of the pandemic, such as those in the aviation and tourism sector, the fitness industry, and “certain retail trade sector awards”

For more information on increases and when they come into effect check out the information here on the Fairwork website

What does this mean for your company?

From 1 July 2021, employers must satisfy the new minimum payment obligations for all relevant staff.  Employers must also ensure that from 1 July 2021 they are paying minimum superannuation contributions of 10% (increased from 9.5%).

The minimum wage increase does not affect employees who already get paid more than their new minimum wage.  The 0.5% increase in super must be applied though.

For more information go to the Fairwork website or contact us at Accru Melbourne.

About the Author
Kate Cain
Kate is a flexible, team player, with a strong mix of communication, organisational, strategic and administration skills, which allow her to work across the diverse spectrums of Human Resources and Training.
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