Everything you need to know about the Annual Wage Review

What is the Annual Wage Review?

The Annual Wage Review is a process carried out by the Fair Work Commission in which a review is provided on the national minimum wage as well as the pay rates under modern awards. After the review is completed, adjustments are then made to reflect the findings of the Review.

What is considered in the Review?

The Annual Wage Review is a transparent process in that all findings, research, submissions or comments are open and available to everyone to view. Furthermore, the Commission if obligated to allow everyone an opportunity to make a submission, or comment on another submission.

Research can be done by the Commission or other regulatory bodies, and again will be transparent and available to anyone who seeks it. A key area of research investigates how the Consumer Price Index for low-paid households has changed, and subsequently how the minimum wage should be adjusted. The Australian Bureau of Statistics provides this research as well as other areas utilised by the Fair Work Commission.

What is the process of the Review?

The Annual Wage Review is made up of a number of steps across roughly 3 months, so thorough research can be done, and everyone’s interests can be heard and commented on. The evaluation process includes:

  • written submissions from interested organisations and individuals,
  • consultations before the Expert Panel,
  • research commissioned by the Expert Panel,
  • minimum wages in modern awards and transitional instruments, and
  • renewing the National Minimum Wage Order from the previous Annual Wage Review.

When does it happen?

The Annual Wage Review generally occurs between March and June each year, which gives the Fair Work Commission and the relevant stakeholders enough time to make their submissions and discuss potential changes. The result of these reviews and changes to the minimum wage will then generally come into effect on the first full pay period on or after July 1st.

Annual wage review 2021

In the 2021 Annual Wage Review, COVID-19 restrictions and impacts led to changes being made to the process, particularly with changes to dates of when alterations to certain award rates came into effect. The 2021 Annual Wage Review had changes come through in 3 stages, with the initial ones, comprised of the National Minimum Wage and many award rates, coming into effect on July 1st2021. For example, the wage increase for the General Retail Industry Award 2020 came into effect on September 1st, and lastly a number of industries who were heavily impacted by COVID-19 restrictions had their wage reviews pushed back until November 1st.

The 2021 national minimum wage was increased to $20.33 an hour, or $772.60 per week from July 1st.

Annual wage review 2022 – Update as at 1/5/2022

The Annual Wage Review for 2022 is underway, with the deadline for submissions having paused on April 1st and the deadline for comments on submissions or research published after April 1st being on May 6th. Take a look at the Fair Work Commission’s Annual Wage Review 2021-22 here.

Speculation has been made about the potential size of the change to award rates. Some unions have been pushing for a 5% increase to the minimum wage, which would give those workers a raise of over $2,000 per year. This is in response to the increase in the cost of living and inflation growing more than wages. 

If you’re interested in payroll compliance in general, make sure to take a look at our Expert Guide on Payroll Compliance.

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