FCB Article: Annual Wage Review 2021

On 16 June 2021, the Fair Work Commission’s (FWC) Minimum Wage Panel handed down its long-anticipated decision on the annual wage review, setting the minimum wages for the next financial year.

After months of considering evidence and submissions from stakeholders, including employer groups, unions and the Government, the FWC has made its determination for the minimum wage across the 2021-2022 financial year. The decision ensured an increase of 2.5% to the National Minimum Wage, effective from the first full pay period after 1 July 2021, which takes it up to $772.60 per week or $20.33 per hour.

However, similar to its decision in 2020, the FWC took into consideration the impact of the COVID-19 pandemic and determined that it was appropriate for the increases to modern award rates to be staggered. Modern awards have therefore been grouped into three industry clusters, being ‘lagging recovery’, ‘almost recovered’, and ‘fully recovered’.

As QTIC members might expect, the tourism sector has been allocated to the ‘lagging recovery’ cluster, granting it the longest period of time before the modern award increases come into effect. However, in the interests of gradually pulling back to a single effective increase date, the deferrals are not as long as they were last year.

The modern award increases will take effect from the first full pay period on or after the following dates:

  1. All Modern Awards except those in groups 2 and 3 below - 1 July 2021
  2. General Retail Industry Award 2020 - 1 September 2021
  • Air Pilots Award 2020
  • Aircraft Cabin Crew Award 2020
  • Airline Operations – Ground Staff Award 2020
  • Airport Employees Award 2020 · Airservices Australia Enterprise Award 2016
  • Alpine Resorts Award 2020 · Amusement, Events and Recreation Award 2020
  • Dry Cleaning and Laundry Industry Award 2020 1 November 2021
  • Fitness Industry Award 2020 · Hair and Beauty Industry Award 2010
  • Hospitality Industry (General) Award 2020
  • Live Performance Award 2020
  • Mannequins and Models Award 2020
  • Marine Tourism and Charter Vessels Award 2020
  • Nursery Award 2020 · Racing Clubs Events Award 2020
  • Racing Industry Ground Maintenance Award 2020
  • Registered and Licensed Clubs Award 2020
  • Restaurant Industry Award 2020
  • Sporting Organisations Award 2020
  • Travelling Shows Award 2020
  • Wine Industry Award 2020

Employers should note that while the tourism-specific awards may fall under the November increase, general awards such as the Clerks – Private Sector Award 2020, which may cover your administrative staff, will undergo an increase as of July.

As the COVID-19 pandemic continues to evolve throughout Australia, the decisions surrounding wage increases have been particularly complex. In making their wage review decision, the FWC took into account a number of economic and social considerations, including:

  • relevant industry-specific data;
  • the period of time between successive review increases; and
  • the likelihood that future lockdowns will be of limited duration and localised, comprising of stay-at-home orders localised to particular regions with limited reasons for people to leave their home.

In anticipation of these wage increases, employers must:

  • review the current wages of their employees and determine if they will be required to be increased as a result of this decision (including award-free employees and any staff members paid moderately above the award);
  • ensure that the relevant processes are in place to implement the required changes (for example, that the new rates have been fed into your payroll system); and
  • where an enterprise agreement is in place, assess the base rates of pay under the agreement against those in the applicable modern award to ensure compliance with s206 of the Fair Work Act 2009 (Cth).

Businesses are also reminded that the increase in superannuation from 9.5% to 10% is effective as of 1 July 2021.

If you have any questions about this decision or its impact on your business, please contact Ceri Hohner, Senior Associate, or Bianca Seeto, Partner, on 07 3046 2100.

Date: 17 June 2021