What You Need To Know For The New Financial Year!

HR Changes You Need to Know for The New Financial Year

The new financial year is just around the corner and there have been several recent changes to the human resource and industrial relations landscape that will begin to come into effect soon. As a part of all of our services, we ensure our clients are aware of HR changes that affect them. Ensuring and maintaining compliance can be difficult for businesses as industrial relations instruments can change frequently, making it hard to keep up. Our HR Advisors have summarised the recent changes coming into effect in the new financial year 2022-2023 below. 

Annual Minimum Wage Increase 

In June the Fair Work Commission announced an increase to the national minimum wage to be effective for most employees from the first full pay cycle in July. This year’s increase was aimed at assisting Australia’s lowest earners and is applied in two ways dependent on wage thresholds. The new National Minimum Wage will increase from $20.33 is $21.38 per hour, an increase of 5.2%. Where employees are paid an Award rate between $20.33 and $22.88 per hour, their rate will increase by $1.05 per hour. Where employees are paid an Award rate above $22.88 an hour their rate will increase by 4.6%. This increase will apply to most Awards from the 1st of July, except those in the tourism, airline and hospitality industries which won’t increase until the 1st of October 2022. 

With the consequences of wage theft and underpayments likely to become increasingly severe employers must apply the wage increase to their pay rates. ProcessWorx HR Advisors recommend employers review their pay rates, including flat rates to ensure they are high enough to account for the increased minimum wage for ordinary hours as well as penalties, entitlements and casual employees. 

Superannuation Increase 

In line with Superannuation legislation, all employers are required to increase Super contributions to 10.5% from the 1st of July 2022. The Superannuation increase is compulsory, and rates will continue to increase by 0.5% every year from July 1st until 2025. Failing to increase superannuation contributions to the legal threshold can result in underpayment of employees and penalties may be applied due to this being a breach of the Superannuation Guarantee Legislation. Employers will need to consider this increase in superannuation going forward for their budgets and wages.

As of the 1st of July 2022, the $450 a week minimum threshold will also be removed. This means that any worker regardless of income will be entitled to superannuation payments from their employer. However, limits still apply to workers under the age of 18 who need to work more than 30 hours a week to be entitled, unless covered by an agreement that states otherwise. 

Annualised Salary Reconciliation 

As a part of every new financial year, employers are required to reconcile employees annualised salaries with records of actual time worked to ensure they are not being underpaid as per modern Awards. This applies to employees who are not on Individual Flexibility Agreements (IFAs). Annualised salary reconciliation requires employers to; collect timesheets, calculate exact entitlements based on timesheets, compare Award entitlements to what was actually received and notify or backpay employees as a result of the review. 

The purpose of this is to ensure that the annual salary accounts for the employee’s true hours of work as they would be paid under the Award, to prevent underpayments from occurring. ProcessWorx clients who are using an IFA for employees do not need to complete the reconciliation and only need to ensure employees are paid better than the minimum entitlements in the Award this is done by ensuring your actual hours of work reflect the better off overall calculation conducted for the employee. Salary reconciliation is a requirement in certain modern Awards including, Clerks – Private Sector, Banking, Finance and Insurance, Health Professionals and Support Services, Pharmacy Industry and Manufacturing Award.

Extensive Changes to the SCHADS Award 

In May the Fair Work Commission announced extensive changes to the Social, Community, Home Care and Disability Services Industry Award. These changes will come into effect from the first full pay period after July 1st, 2022. This includes changes to the minimum pay rates, minimum engagement periods, broken shift allowances, remote work rules and shift work. The changes to the Award are extensive and specific to work circumstances, so we recommend speaking with a ProcessWorx HR Advisor directly to understand and implement the changes in your business. 

To protect your business from ongoing changes to the HR and IR landscape your broader HR system must be compliant and up to date. If you need assistance implementing the above changes in your business, please contact ProcessWorx and we can assist you with your HR compliance.

If you would like more information about HR or industrial relations for your business, contact the ProcessWorx HR consultants on (08) 9316 9896. Visit our website for more information on HR and Work Health and Safety support for business owners https://www.processworx.com.au/

Follow ProcessWorx on LinkedInFacebookInstagramYouTube, and Twitter to keep up with the latest HR and Safety news.

Written by Danielle McNamee

Share:

More Posts

How to have a pet friendly office

How To Have A Pet Friendly Office

In the last few years, pet ownership has skyrocketed! With the workforce shift to remote work, we have become accustomed to working alongside our pets.

Farm Safety Week

Time to Act Now for Farm Safety

Work, Health and Safety has gained significant attention this year in agriculture with the introduction of the Work Health and Safety Act (2020) in March,

Contact us for help

Contact Us

Start your HR or Safety assessment for your business

Treat yourself

Let Us Take Care Of You

Copyright © ProcessWorx 2022

marisa ross team photo

Marisa Ross

HR Advisor

Marisa is an experienced and motivated HR professional with a strong HR generalist and business operations background with a focus on employee relations, performance management, leadership training & development, workers compensation & injury management, and employee retention. Marisa holds a Bachelor of Human Resource Management and a Bachelor of Behavioural Science with a minor in Counselling. Having worked in a variety of industries from SMEs to large blue-chip organisations, Marisa is passionate about enriching employee experience, employee retention, and building leadership capability in people management.

Aimee Grigson

Aimee Grigson

WHS Advisor

Aimee has a strong understanding of Workplace Health and Safety Legislation and standards and has extensive HSEQ experience in a number of industries. Aimee has a great ability to engage across all levels of organisation, including field teams, leadership and external stakeholders. Aimee ensures Health and Safety Management Systems are compliant to legislation, effectively implemented and understood by all. Aimee has a Certificate IV in Work Health and Safety and qualifications in auditing and incident investigations. Aimee is passionate about coaching and developing small businesses towards a positive safety culture.