The Fair Work Commission has announced a 2.4% increase to minimum wages as a result of the Annual Wage Review. This increase applies to the first full pay period that starts on or after 1 July 2016.

From 1 July 2016, the new minimum wage is $672.70 per week for a full time employee or $17.70 per hour.

Minimum Wage increases by 2.4% from 1 July 2016 - Annual Wage Review

This increase doesn’t apply to employees that are already being paid more than the minimum wage but it is a good time to check your pay rates to confirm that you are still paying above the Award rate.

It is important to make sure you are paying your employees correctly. Underpaying staff could result in action being taken by the Fair Work Ombudsman. Recently a Sydney-based business was fined $272,000 for underpaying their staff.

Equally important is ensuring that you are providing the correct entitlements in relation to leave, penalty rates and hours of work. The Fair Work Information Statement sets out the minimum entitlements for workers.

Here are some tips to help you meet your obligations:

  • Ensure you regularly check pay rates – Award rates usually increase on or around 1 July each year, so June or July each year is a good time to do a payroll audit.
  • Know the Award that covers each individual employee in your organisation. Sometimes, more than one Award will apply. You shouldn’t assume that the same Award covers all of your employees, as this may not be the case.
  • Make sure that you have employment contracts for all of your employees and that they are compliant with Award rates and conditions.
  • Provide all employees with a Fair Work Information Statement.
  • There are 122 different Modern Awards used in Australia, divided by industry and sector. Make sure you understand which Award is relevant to your employees. Get advice if you are not sure.
  • Modern Awards don’t cover some industries, managers, positions or high-income earners.
  • Even if you are paying your employees over Award rates, you still need to ensure you are paying appropriate penalty and overtime rates, if applicable.
  • One of the most common misunderstandings about entitlements occurs sometimes when employees are paid above Award rates.
  • Make sure you are clear about what an annual salary covers.

Take the time at the beginning of the employment relationship to set out your expectations to staff.

Ensuring your business is compliant with Fair Work legislation can help you avoid fines and financial problems in the future. More importantly, you will ensure that all of your employees are being paid what they are entitled to. Happy, engaged staff should be a priority in any business.

We can assist you in checking if you are complying with Fair Work legislation. We can conduct a free HR Audit to check what processes and documents you have in place. Contact Karen at Hillen Staff Solutions for more information or call on 1 300 662 399.