Annual Wage Review 2021–22

The Fair Work Commission has handed down its decision in the 2021 / 2022 annual wage review today.

This decision means effective 1 July 2022, for most employees, the award rate of pay will increase by the higher of $40 per week or 4.6%. When combined with the 0.5% increase in compulsory superannuation, also effective 1 July 2022, this equates to a minimum increase in employee compensation of 5.1%, which is in line with the March 2022 annual inflation rate.

If your employee is covered by any of the below awards, the above does not apply till 1 October 2022:

Aircraft Cabin Crew Award 2020
Airline Operations – Ground Staff Award 2020
Air Pilots Award 2020
Airport Employees Award 2020
Airservices Australia Enterprise Award 2016
Alpine Resorts Award 2020
Hospitality Industry (General) Award 2020
Marine Tourism and Charter Vessels Award 2020
Registered and Licensed Clubs Award 2020
Restaurant Industry Award 2020.

Does this mean I automatically have to increase my rates of pay?

No, the announced changes only apply to the minimum rates of pay. If you pay above award wages, you may not need to pass on any or all of the increase in award rates.

For example if the employee is on $1,000 a week and the revised minimum rates of pay for that person is now $950, there is no legal requirement to increase their pay. If the revised minimum rates of pay for that person is now $1,020, you may only need to increase their pay by $20 or 2%.

So what do I need to do as an Employer?

You need to take steps to ensure that you comply with the minimum wage rules. And to do this you will need to do a mini payroll audit. Here are the steps in this audit:

Step 1 – get a list of all current employees, their current wage rate and their award classification.

Step 2 – obtain from the Fair Work website the revised minimum rates applicable 1 July 2022 of pay for each employee based on their award classification.

Step 3 – compare the current rate of pay per employee with the minimum rate of pay.

Now you have 2 potential outcomes.

Outcome 1 – Their current rate of pay is above the revised minimum rate of pay effective 1 July 2022. There is no legal requirement to increase this person’s pay. You can increase it if you want to. This assumes the person does not work unpaid overtime. If they do, you will need to work out what their annualised wage rate is including unpaid overtime and will need to compare this to the revised minimum rate of pay effective 1 July 2022.

Outcome 2 – The current rate of pay is below the revised minimum rate of pay effective 1 July 2022. In this situation you need to increase their pay to at least the minimum rate of pay. You can pay them more, but not less.

If you want some help, contact me below.

If you like this, why not share this with a friend, simply click on one of the icons to the left or below

[simple-social-share]

Contact Wayne Wanders for your FREE Business Survival Session

To ensure I help your business specifically, the best approach I have found is to have an obligation free session with you. In this session we will review your current business in a factual and objective manner, to better understand the challenges that you face. And this session does not need to be face to face.

At the end of this session, you will have multiple ideas on how your business can survive and thrive in these uncertain times.

Simply fill in the contact form below or email me at wayne@aRealCFO.com.au or call me on 0412 227 052 to organise one of these obligation free sessions.

To get help you successfully navigate your way through your financial challenges so your business can survive and thrive in these uncertain times, simply use the contact form on the left to email Wayne or call him on 0412 227 052.

We promise to keep your email address safe.

Let Wayne Wanders, a fully qualified and experienced CFO, help you successfully navigate your way through your financial challenges so your business can survive and thrive in these uncertain times.

Wayne Wanders, A Real CFO

wayne@aRealCFO.com.au

If you like this, why not share this with a friend, simply click on one of the icons to the left or below