8th June 2023

Annual Wage Review 2022-23: Important Updates for Employers

We have some crucial information to share regarding the Annual Wage Review decision recently announced by the Fair Work Commission. As always, it's essential to stay informed about changes that impact your organisation and employees.


On June 2 2023, The Fairwork Commission announced that the National Minimum Wage will be aligned with the higher C13 classification as of July 1, 2023. This alignment will result in an increase from $21.38 to $23.23 per hour, or from $812.60 to $882.80 per week for a standard 38-hour workweek. Additionally, modern award minimum wages will experience a 5.75% increase. Employers have a responsibility to ensure that employees covered by awards are paid at least the minimum wage specified in their respective awards, even if they are subject to an enterprise agreement.

It's worth highlighting that the minimum wage increase for certain aged care employees falls under the work value case and will see an additional 15% rise. This acknowledgment reflects the invaluable contributions made by these employees in the aged care sector.


The Annual Wage Review encompasses two key tasks: reviewing and setting the National Minimum Wage and reviewing minimum wages in modern awards. This decision has implications for approximately a quarter of Australian employees, primarily those in part-time, female, and casual positions, who often fall into the low-paid category. It's worth noting that the economic impact of this decision is limited, as the modern award-reliant workforce constitutes only a small portion of the national wage bill.


The outcome of the review reflects considerations such as living standards, the needs of low-paid workers, workforce participation, and the performance of the national economy. Additionally, it places emphasis on gender equality and job security, acknowledging their significance in today's workplace. During the review process, stakeholders, including employers, trade unions, and government representatives, were actively consulted. Their valuable input helped shape the final decision, ensuring a balanced and inclusive approach to determining fair minimum wages.


While specific proposals were considered, the Fair Work Commission ultimately exercises its judgment to establish equitable minimum wages. The impact of inflation on employees' financial well-being, the potential to narrow the gender pay gap, and the forthcoming increase in Superannuation Guarantee contributions were among the factors carefully taken into account. It's crucial for employers to be aware of these considerations when planning their payroll and compensation strategies.


Recognizing the gender equality issues in modern award minimum wage rates, the Fair Work Commission aims to address them in future reviews or other proceedings. To this end, a research project is planned to identify occupations and industries where gender pay inequity and undervaluation may exist. The ultimate goal is to resolve these issues promptly and foster a fair and inclusive work environment.


Lastly, employers should be mindful that the superannuation guarantee rate will increase from 10.5% to 11% starting July 1, 2023. It's crucial to ensure compliance with this adjustment and make the necessary updates to your payroll systems accordingly.


For further details and a comprehensive understanding of the Annual Wage Review decision, we encourage you to access the full decision available here. It offers valuable insights into the factors considered and the reasoning behind the Commission's determinations.


Stay proactive and well-informed, as these updates have significant implications for your organisation and its workforce. By staying abreast of these changes, you can ensure fair and compliant practices within your HR operations.

Annual Wage Review 2022-23: Important Updates for Employers

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