Legal Update Alert! Increase to minimum wages & super guarantee contributions
O*NO! We know you’re probably busy with all of the end of financial year chaos, but in case you missed it, the Fair Work Commission have announced an increase to minimum wage starting from 1 July 2023. There will also be an increase in your super guarantee constribution from this date. So, if you have employees covered by an Award or those receiving minimum wage, it is essential for you to update your payroll system to accommodate these changes.
Increase in minimum wage
The minimum wage applies to all working Australians and sets out the minimum amount an employee must legally be paid.
Each financial year the Fair Work Commission reviews the minimum wage, and it has announced the National Minimum Wage will be increased by ~$70/week, amounting to an increase of 8.6%; This means the minimum wage is now $23.23 per hour, or $882.80 per 38-hour week.
Increase to Modern 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 5.75%.
This increase will be applicable to all modern award minimum wages and modern enterprise award wages. This extends to junior employees and those with training arrangements.
Increase to Superannuation Guarantee
Superannuation Guarantee refers to the contribution an employer is required to make to their employees super fund. This contribution is calculated as a percentage of the employees gross wage.
From July 1, 2023, there will be a 0.5% increase in the employer's contribution towards superannuation. As a result, employers will now be required to contribute 11% to entitled employees.
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 2023.
This means when your next pay period starts on or after 1 July, your payroll needs to reflect the increase in wages and superannuation contributions from the start of that pay period.
Your next steps:
To read a summary of the Fair Work Commission’s decision see here.
For further information or if you want to have your employment arrangements legally reviewed, book in for your FREE 10 minute call to get started with a real estate agency lawyer or send us an email at [email protected]
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.