As of the first pay period from 1 July 2012, all modern award minimum wage rates in Australia, including transitional instruments, will increase by 2.9%. Recently handed down by Fair Work Australia (FWA) at the completion of its minimum wage review, the rise adds $17.10 to the Federal minimum weekly wage, lifting it to $606.40.
No deferrals were granted to individual enterprises, as had previously been available to employers still suffering the effects of natural disasters, and neither was an application made for a State-based deferral for South Australia (SA). This was despite the review’s submissions clearly showing that economic performance across the States continued to differ substantially, with Business SA’s submission claiming South Australia was in the “economic slow lane”.
FWA actually suggested in the review that it probably does not have the power to grant a State-based deferral, because of “the Fair Work Act’sprohibition in respect of interstate wage differentials”. Although in the absence of a test case the issue remained undetermined, it said.
The implication of the across-the-board rise in minimum wage rates for SA employers, particularly many small businesses, is that, where award wages are paid, it will exacerbate existing cost pressures in a challenging, low-growth economic environment.
This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this article, or what it means for you, your business or your clients' businesses, please feel free to contact us.