Australian Minimum Wage increase 2019

Make sure you’re paying your employees correctly!

On 30 May 2019, the Fair Work Commission announced a 3% increase to the minimum wage. This increase will benefit approximately 2.2 million Australian workers. The annual increase comes after careful review of the current economic situation in Australia, particularly in relation to lower inflation rates and GDP growth. The increase which will take effect on 1 July 2019, will see an increase to a weekly minimum wage of $740.80 or $19.49 per hour and will be issued to those employees paid at the minimum wage or under a modern award.

Over the last three years (2016-2018), the Fair Work Commission has increased the minimum wage by a total of 9.2% and has come under much scrutiny from the Australian Chamber of Commerce. The Australian Chamber of Commerce advocated for a 1.8% increase in the minimum wage for the 2019 year. The Chamber has argued that a larger increase will see jobs and the viability of some small businesses put at risk as the increase, which is considered ‘well in excess of inflation’, will be deemed difficult for small businesses to absorb. With the economy slowing, businesses are struggling to cope with high and rising input costs and is expected to cost these employers an additional $3.1 billion per year.

On the other side of this argument, the Australian Council of Trade Unions, who called for a much larger increase of 6%, considered the 3% increase a win for employees reliant on minimum wages but stated it was ‘still not enough to be considered a living wage’. With the cost of living increasing, these employees who are reliant on the minimum wage and modern awards are struggling to maintain and support their families’ week in week out. Iain Ross, President of the Fair Work Commission, pointed out that ‘some low paid, award-reliant employee households have disposable incomes which are less than the 60% of median income relative poverty line’. These Australians are living in significant disadvantage and with penalty rates still under attack this increase must be considered vital to ensure that more Australians do not fall under the poverty line.

If you are currently paying your employees in accordance with a modern award or the National Minimum wage it is important to review these rates before 1 July 2019 to ensure you are paying your employees the correct amount. You can calculate minimum pay rates, penalties and allowances under an award using the Fair Work Ombudsman pay calculator or for concerns and queries contact the Fair Work Ombudsman directly. If you have any further questions about any points in this article, please complete your details below and we’ll be in touch or give us a call on 03 9835 8200.

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Accru Melbourne , Melbourne
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