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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 2023 – Update as at 27/6/23
The Annual Wage Review 2023 increased the Modern Award Minimum Wages by 5.75%.
However, for awards where the lowest classification rates were subject to the National Minimum Wage (NMW), the basis for calculation of the NMW rate has been changed, so that where adult rates were previously below $834.80, they will be increased to $882.80.
This mean some classifications in awards (such as the Introductory rate in the Restaurant Industry Award as one example), the percentage increase will be 8.6%.
These changes to the Modern Award Minimum Wages and the National Minimum Wage will be implemented from the first pay period on or after 1 July 2023.
Need more assistance?
If you haven’t already, make sure to download our free wage schedules by clicking here.
ER Strategies are also here to help with any issue related to the award rates and paying your employees. You can contact us on 1300 55 66 37, or by clicking here.