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How will the national minimum wage increase affect your business?

The Australian National Minimum Wage is set to increase from July 1 2014 by 3 per cent.

On July 1 2014, the national minimum wage (NMW) will increase by 3 per cent and the transitional arrangements of modern awards will end. 

In June this year, the Fair Work Commission (FWC) decided to increase the national minimum wage by 3 per cent following the Annual Wage Review (AWR) for 2013/14. The change will take effect from an employee's first full pay period on, or after, July 1 2014. 

The 2013/14 NMW increase is greater than the previous year, however employment growth for the 2014/15 period is expected to be more than the previous two years, according to the 2013/14 AWR.

The Queensland government and the Chamber of Commerce and Industry Queensland (CCIQ) made submissions to the FWC for the 2013/14 AWR. The Queensland government recommended any adjustments to the NMW be cautious. The CCIQ, which represents more than 25,000 businesses, said they supported an increase of no more than $8.50 or 1.3 per cent of NMW.

The 2013/14 AWR recommended the changes based on economic and social considerations. The 2013/14 AWR states Australia's outlook will remain stable with relatively low unemployment and moderate inflation expected. Growth is forecast for Australia's major trading partners at 4.75 per cent and will stay above the global average of forecasted GDP growth.

The transitional arrangements put in place for modern awards will also end on July 1. For employers, this means the full pay rates, penalties and casual loadings will now apply to all but two awards in Queensland; the Cleaning Services Award and Social Community Home Care and Disability Services Industry Award. 

The new pay rate will mean the weekly pay packet of a full-time adult will increase from $622.20 for a 38-hour week to $640.90 a week and the hourly rate will increase from $16.37 to $16.87. The changes will directly affect more than 1.5 million Australians who are reliant on awards. This is $18.70 more a week per full-time employee and a 50 cent increase an hour for the NMW. 

To learn more about your obligations as an employer in Brisbane, contact an employment contract lawyer today.