The Fair Work Commission (FWC) made the National Minimum Wage Order 2021 (the Order) on 16 June 2021. The Order increases minimum wages, including minimum award rates, by 2.5%.
The award increase will happen in three stages. Most awards, including those covering Australian Government employment, will increase from 1 July 2021. Wages in the Retail Award will increase from 1 September 2021. Based on exceptional circumstances the rates in 21 other specified awards will increase from 1 November 2021.
Actions agencies need to take
Commonwealth employers have obligations under the Fair Work Act 2009 to ensure their employees are paid correctly. The base rate of pay for an employee must not be less than the base rate of pay payable under the award which covers that employee.
For existing industrial instruments, agencies should ensure that employees are being paid at least the new award minimum pay rates. As an example, the minimum hourly pay rate for an APS Level 1 employee will increase from $22.61 to $23.18 on 1 July 2021.
The Fair Work Commission will update minimum pay rates in awards. Agencies should refer to their relevant award to ensure payroll processes are up to date and accurate and to avoid any potential for underpayments. Information on the correction of underpayment of wages can be found in this APSC Circular.
Agencies should also be aware that this adjustment will also flow through to employees engaged through the Supported Wage System. The Awards will be updated accordingly.
Agencies in bargaining or planning for bargaining should also assess whether these changes have an impact on the ‘better off overall test’ for proposed new enterprise agreements.
Further information and advice
For further information, please contact the Australian Public Service Commission at firstname.lastname@example.org or your agency’s relationship manager.