By Lauren Drummond

Last week, on 1 June, the Expert Panel of the Fair Work Commission (FWC) delivered its decision in relation to the new the National Minimum Wage for the next financial year.

This follows a review process that involved submissions by various interested organisations, including the Australian Council of Trade Unions, the Australian Industry Group and the Australian Chamber of Commerce and Industry.

The Fair Work Act 2009 (Cth) requires that the FWC conduct an annual wage review in each financial year.

The FWC is required to establish and maintain a safety net of fair minimum wages, as well as to ensure that modern awards provide a fair and relevant minimum safety net of terms and conditions. It requires the Expert Panel to consider a number of factors, including:

• promoting social inclusion through increased workforce participation;
• relative living standards and the needs of the low paid;
• the principle of equal remuneration for work of equal or comparable value;
• various economic considerations.

The order for the National Minimum Wage increase will come into effect from 1 July 2018.

The increase

The Expert Panel determined to apply a 3.5% increase to the National Minimum Wage, constituting an increase of $24.30 per week to the weekly rate or 64 cents per hour to the hourly rate. The new National Minimum Wage is to be set at $719.20 per week or $18.93 per hour. The current National Minimum Wage is $694.90 per week and $18.29 per hour.

The decision also includes two special national minimum wages for award/agreement-free employees with a disability. This will require employees with a disability, whose productivity is not affected, to be paid a minimum wage of $719.20 per week or $18.93 per hour.

For employees whose productivity is affected, they will be assessed under the supported wage system, which will be subject to a minimum payment that is fixed in accordance with the supported wage system schedule.

Junior employees that are award/agreement-free will be paid based on the percentages for juniors in the Miscellaneous Award 2010.

Also, award/agreement-free employees that perform work under a training arrangement will be paid in accordance with the apprentice provisions and national training wage schedule in the Miscellaneous Award 2010, with transitional arrangements for first-year award/agreement-free adult apprentices engaged before 1 July 2014.

The casual loading of 25% will continue to apply to award/agreement-free employees.

Minimum weekly wages in modern awards will be adjusted in accordance with the 3.5% increase (with commensurate increases to hourly rates) from the first full pay period after 1 July 2018.