The Fair Work Commission (FWC) has announced its decision for the 2023-2024 Annual Wage Review, conducted under section 285 of the Fair Work Act 2009. This review comprised the following two tasks:

1. National Minimum Wage Order
To review and set the National Minimum Wage, which affects a small number of employees not covered by modern awards or enterprise agreements.

2. Modern Award Minimum Wages
To review the minimum wages set by 121 modern awards. These awards impact approximately 20.7% of the Australian workforce, translating to around 2.6 million employees. The decision also indirectly affects additional employees through various means.

Factors the FWC took into account include:

1. Employee Characteristics
Those reliant on modern award minimum wages tend to be part-time workers, predominantly women, and almost half are casual employees, typically earning lower wages.

2. Economic Impact
The total wage cost for this group constitutes less than 11% of the national wage bill. The economic effect is concentrated in four industry sectors, with negligible impact on others.

3. Other considerations
The Fair Work Act mandates considerations such as living standards, needs of the low paid, workforce participation, economic performance, and gender equality. Submissions from various stakeholders, including employer and employee organisations and government bodies, were reviewed.

Wage Increase Decision

The Commission has decided to increase both the National Minimum Wage and modern award minimum wage rates by 3.75%, effective from 1 July 2024. For a full-time worker (38 hours per week) that’s an hourly wage of $24.10 (or $915.90 per week). This decision was influenced by ongoing cost-of-living pressures and the need to avoid further reduction in real wage rates despite inflation being lower than last year. The increase aligns with forecasted wage growth and supports the anticipated return of inflation to below 3% in 2025.

Gender Pay Equity Initiatives

A new program will address gender undervaluation in specific modern awards, focusing on sectors like early childhood education, disability care, and other community services. This initiative aims to complete by next year's review, setting the stage for broader gender equity measures.

How Ignite HR & Employment Law Can Assist Employers with These Changes

Ignite HR & Employment Law is here to support employers in navigating the complexities of the new wage review decision. Our expert team can provide comprehensive advice on how to implement the 3.75% wage increase in compliance with the updated regulations, ensuring that your business remains aligned with legal requirements. We offer tailored solutions for updating payroll systems, revising employment contracts, and managing employee communications to facilitate a smooth transition.

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