Legal Update Alert! Minimum wages in Australia have increased
You’ve been busy dealing with lead up to end of financial year and haven’t kept up to date with the Fair Work Commission’s announcement of the minimum wage increase from 1 July 2022. If you have employees under an Award or if they are being paid minimum wage, this will mean you’ll need to make changes to your payroll very soon.
Increase in minimum wage
The minimum wage applies to all working Australians and sets out the minimum amount an employee can legally be paid.
Each financial year the Fair Work Commission reviews the minimum wage and it has announced that certain changes are to take effect:-
The National Minimum Wage will be increased by $40/week, amounting to an increase of 5.2%; and
Award minimum wages will be increased by 4.6%, subject to a minimum increase of $40/week for full-time employees based on a 38 hour work week
Increase to Awards
Most employees are covered by an award based on the industry or occupation in which they’re employed. Each Award sets out the base conditions and pay for each level or classification of employee under that award. With the recent Fair Work Commission announcement, those base pay rates will be increased by 4.6% subject to a minimum increase of $40/week for full-time employees.
This means:
If you’re paying more than $869.60/week, the employee will get a 4.6% increase
If you’re paying less than $869.60/week, the employee will get a $40 increase.
These increases will take place from 1 July 2022 for the majority of awards, with some awards in aviation, hospitality and tourism industries increasing from 1 October 2022.
Minimum National Wage
If you have employees not covered by an award or registered agreement, the National Minimum Wage will apply to them.
The new National Minimum Wage will apply from the first full pay period from 1 July 2022 where wages will be increased by $40 per week which equates to 5.2%.
This means the new minimum wage will be $812.60/week or $21.38/hour.
Registered agreements
If you have employees covered by a registered agreement the minimum wage increase may apply to them as well as the base pay amount in a registered agreement can’t be less than the base rate payable under the equivalent award.
What does this mean for employers in real estate?
If you run a real estate agency and employ admin officers or agents under an award such as the Clerks Private Sector Award or Real Estate Industry Award, or have employees subject to the National Minimum Wage the increase in minimum wage will apply to those employees from 1 July 2022.
This means when your next pay period starts on or after 1 July, your payroll needs to reflect the increase in wages from the start of that pay period.
Your Next Steps
The Fair Work Ombudsman will be publishing tools and resources on 1 July 2022 to assist you in making sure that you calculate the new increases to your employees’ minimum wage or award correctly.
For further information or if you want to have your employment arrangements legally reviewed, contact Realgate legal team at letschat@realgate.com.au or join the REAL Membership where you will have access to our real estate specific Contractor and Employment Agreement templates that are updated to comply with the legislative changes to ensure you remain compliant with employment legislation.
Frequently Asked Questions (FAQ)
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The increase applies from 1 July 2022, from the first full pay period on or after that date.
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The National Minimum Wage increased by $40 per week (about 5.2%).
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Most award wages increase by 4.6%, with a minimum $40 weekly increase for full-time workers.
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It applies to employees on the National Minimum Wage or covered by an Award or registered agreement.
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Employers must update payroll from the correct pay period and ensure all relevant employees receive the new rates.
Kristen Porter – Partner, Realgate Legal
Kristen Porter is one of the Partners at Realgate Legal. With over 20 years of legal experience and dual degrees in Law and Commerce, Kristen brings a rare blend of legal expertise and commercial insight to every matter. She is a trusted advisor to business owners and agency leaders across Australia, helping them build profitable, legally-sound businesses.
Known for her practical, no-fluff advice, Kristen specialises in real estate agency law, corporate, and privacy law and regularly presents at industry events. At Realgate Legal, Kristen leads a team committed to making the law clear, actionable, and always aligned with your business goals.
Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.