Minimum wage increase - the how and why

This wage increase is higher than last year’s but the Panel justified the decision given the current positive economic environment, the scheduled Super Guarantee increase to 10 per cent on 1 July 2021 and the tax-transfer changes.

The Fair Work Commission can delay the date the increase takes effect if the majority of the Panel believes ‘exceptional circumstances’ exist. However, the Panel did not believe a delay was warranted for the health care sector.

Other industries will have different dates to comply with the wage increase based on their impact and recovery from the pandemic. Academic Professor Borland, categorised industry sectors into ‘fully recovered’, ‘almost recovered’, and ‘lagging recovery’, which fed into the last two Annual Wage Review decisions (2020 and 2021).

Three additional factors were taken into account to determine whether exceptional circumstances existed to delay the increase in minimum rates.

1.            Relevant industry specific data.

2.            The period of time between successive Review increases.

3.            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.

The Panel found the hardest hit by the pandemic would be hairdressing and beauty services; gyms, retail stores other than the ‘click and collect’ varieties; accommodation and hospitality businesses (other than takeaway businesses); and businesses operating in the tourism, entertainment and sport sectors.

Employees covered by the General Retail Industry Award 2020 have their minimum award rates postponed until 1 September 2021. Similarly, employees across 21 Modern Awards, in air transport-related industries, employees in the fitness, hair and beauty, nursery, racing industry and hospitality (but not fast food) industries, amongst others, will not be receiving an increase in minimum award rates until 1 November 2021.

This wage increase will have a major impact on our members who are employers but we are here to help.

We are committed to providing our Award Subscribers and WRAP members with timely and relevant information and will issue the updated Pay Rates Summary for 2021-22 before 1 July 2021. 

Please email the Workplace Relations Team at workplacerelations@amaq.com.au if you need any other assistance.