Increases to State and National Minimum Wage and High-Income Threshold Announced

Written on the 20 June 2016

With the start of the new financial year, employers should be aware of the changes that are effective as of 1 July 2016.

New National Minimum Wage

General

The national minimum wage (NMW) decision was handed down on 31 May 2016, effectively increasing the NMW by 2.4%. This means that, from the first full pay period on or after 1 July 2016, the NMW for award/ agreement free employees of national system employers (other than juniors, apprentices, trainees and employees with a disability) will be $672.70 per week or $17.70 per hour. The hourly rate has been calculated by dividing the weekly rate by 38 (as the weekly amount is based on a 38 hour week for a full-time employee).

Junior Employees

The NMW increase will flow through to award/ agreement free junior employees who will receive the appropriate percentage of the NMW based on their age, in accordance with the junior percentages outlined in the Miscellaneous Award 2010.

Apprentices

Award/ agreement free apprentices must receive at least a base rate that equates to the relevant percentage for their year of apprenticeship as outlined in clause 14.1 of the Miscellaneous Award 2010, calculated on the Level 3 rate in clause 14.3 of that award.

However, award/ agreement free adult apprentices who commenced their apprenticeship before 1 July 2014 and are in their first year of their apprenticeship must not receive less than $622.20 per week (or $16.37 per hour).

An adult apprentice for the purposes of the NMW Order is a person who was 21 years of age or over at the time of commencing their apprenticeship.

Trainees

Award/ agreement free employees to whom training arrangements apply (other than apprentices) must at least receive the rate of wage outlined in Schedule E National Training Wage of the Miscellaneous Award 2010.

Casuals
The casual loading for award/agreement free employees as well as modern award covered employees will remain at 25%.

Supported Wage System

The NMW Order includes a minimum wage of $672.70 per week or $17.70 per hour for employees with a disability whose productivity is not affected. For employees with a disability whose productivity is affected, an assessment under the Supported Wage System is required, subject to a minimum payment.
Junior Employees
Award Covered Employees
The NMW decision also flows through to modern award covered employees with the 2.4% minimum wage increase applying to all modern award wage rates from the first full period on or after 1 July 2016. This increase will flow through to junior employees, apprentices, trainees, supported wage system employees, casuals and employees engaged on piece rates or commission under their award.

New State Minimum Wage

In a decision handed down on Friday, 10 June 2016, the Western Australian Industrial Relations Commission increased the State Minimum Wage (SMW) by a flat $13 increase. Effective from the first pay period on or after 1 July 2016, the new SMW will be $692.90 (or $18.23 per hour for full time and part time adult employees). This increase applies to employers and award/ agreement free employees operating in the State industrial relations system (i.e. sole traders and some partnerships and unincorporated trusts).

The increase represents a 1.9% increase to the SMW.  While higher than predicted, inflation of 1.25% it is below the national increase. This moderate increase also reduces the gap between the SMW and NMW to $20.20 per week. The SMW increase will also take affect from the first full pay period on or after 1 July 2016 and will flow through to State award wage rates, included junior, apprentice and trainee rates of pay.

High Income Threshold

The high-income threshold for unfair dismissal under the Fair Work Act 2009 (Cth) will increase from $136,700 to $138,900 at 1 July 2016. This means that award/ agreement free employees earning over this new high income threshold are not eligible to access unfair dismissal remedies.

General
Members are reminded that this NMW decision applies only to national system employers and employees, and that the SMW decision only applies to state system employers and employees.

To confirm which industrial relations system applies to your business or for more information on new minimum wage rates, contact CCI's Employee Relations Advice Centre on (08) 9365 7660 or email advice@cciwa.com

CCI will provide updated wage schedules to industrial award subscribing members in the coming weeks. For more information on CCI's Industrial Award subscriptions service, contact the Employee Relations Advice Centre.