How does the minimum wage increase affect you?

The Fair Work Commission has recently increased the national minimum wage by 2.4%. So what does this mean for small business?

 

The WA Industrial Relations Commission

The WAIRC issued a decision increasing the WA weekly minimum wage on June 10. The increase will only apply to employees who are paid the minimum wage – “any wage paid above the award wage is able to be used to offset the increase”. The increase applies to employees and employers who are in the WA industrial relations system – mainly businesses which are not companies and WA public servants. The increase takes effect on 1 July 2016.

 

The National Decision

The annual minimum wage review applies to almost all employees: employees covered by modern awards, enterprise awards or transitional APCSs, the adult national minimum wage, and the minimum wage for juniors, apprentices, trainees and workers with a disability. The increase does not apply to rates prescribed by an enterprise agreement. The agreement may refer to an increase in relation to the annual review, but it does not automatically flow on to these rates. The increase takes effect on 1 July 2016.

 

The State Decision

There has also recently been an increase in the Western Australia minimum wage. The weekly minimum wage has been increased by 1.9%, or $13 per week. Workers on the minimum wage will now earn up to $692.90 per week.

 

How does this affect your business?

If you have entered into an enterprise agreement, you need to ensure that the minimum wages within the agreement are not lower than the new national minimum wage. If this is the case, your employees will now be covered by the relevant award, and their wages may have to be increased accordingly on 1 July 2016.

 

What about the National Employment Standards?

The National Employment Standards (NES) will also override an enterprise agreement if it is found that your employees are worse off under the agreement.

 

All minimum rates under any type of agreement must be higher than the national minimum wage – if they are found not to be, the NES will override the agreement and employees will have to be paid the higher minimum wage rate.

 

Remember to always keep up to date with the national or state minimum wage – it will not only benefit your employees, but your small business as well. Employees will be happier with higher wages, resulting in higher productivity in the workplace and higher employee retention rates.

 

For more information on how the national minimum wage increase affects your business, contact us on (08) 9316 9896 or visit www.processworx.com.au.

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