The annual announcement by the Fair Work Commission (FWC) regarding the annual Minimum Wage Review has just been handed down. Let’s not hold you in suspense….

This year, the FWC determined that both Modern Awards and the National Minimum Wage would be increased by 3.5% effective from 1 July 2025.

In reaching this decision, the FWC has factored in the Reserve Bank of Australia’s position that inflation is within target range (2-3%) and that the sustained period of inflationary pressure is now over.  The FWC determined that this provided them with an opportunity to be able to correct (in part) the very real decline in the real wages “which have declined by 4.5 per centage points relative to inflation.”

Superannuation Guarantee Reminder

While we are talking about changes that kick in from 1 July, employers need to remember that the minimum superannuation guarantee increases to 12% up from 11.5% as well.  This represents the final increase in the staggered approach that has seen superannuation increasing at a rate of .5% each year since 2021.

What Employers Need to Do Now

If you are currently paying anyone at the minimum entitlement under their Award, you must apply the increase from 1st July (first pay cycle after this date). This timing also applies to the increased superannuation guarantee rate.

If you currently pay above the Award, you must ensure that the current rate of pay remains at, or higher than, the new relevant Award rate of pay.

The new national minimum wage will be $948 per week or $24.95 per hour.

For those operating under an EBA you must ensure that your rates of pay are at least equal to the new Award rates (irrespective of having an EBA in place, rates cannot be lower than those contained in the relevant award).

If you have Individual Flexibility Agreements in place, you will need to review these arrangements ensuring employees remain “better off overall” when compared to the newly increased Modern Award rates.

If you pay any of your employees under annualised salary arrangements you will need to conduct an audit of those annualised salaries against the new Award rates and working patterns to ensure the annual salary compensates adequately for the increased award entitlements.

As always, the HR Staff n’ Stuff team is here to help if you have any questions about these changes or how they apply to your business.