National Minimum Wage & Modern Award Minimum Wage
Employers should be aware that a minimum wage is an employee’s base rate of pay for ordinary hours worked. It is generally dependent on the industrial instrument that applies to their employment. For example, a modern award or registered agreement.
Employers and employees cannot be paid less than their applicable minimum wage, even if they agree to it.
The Fair Work Commission made a decision on 6 June 2017 to increase both the national minimum wage rate and the modern award minimum wage rates by 3.3% to take effect from the first full pay period after 1 July 2017.
The maximum superannuation contribution base will increase from $51,620.00 to $52,760.00 per quarter.
The superannuation guarantee remains at 9.5% of ordinary time earnings, and will not change until 1 July 2021 when it increases to 10%.
Super is money you pay for your workers to provide for their retirement.
Generally, if you pay an employee $450 or more before tax in a calendar month, you have to pay super on top of their wages.
The minimum you must pay is called the super guarantee (SG):
- The SG is currently 9.5% of an employee’s ordinary time earnings.
- You must pay SG at least four times a year, by the quarterly due dates.
- You must pay and report super electronically in a standard format, ensuring you meet SuperStream requirements.
- Your super payments must go to a complying super fund – most employees can choose their own fund.
- If an employer doesn’t pay the super guarantee on time, the employer may have to pay the super guarantee charge.
Unfair dismissal high-income threshold and compensation limit
The high income threshold for unfair dismissals refers to the highest possible income an employee can have, unless they are covered by an award or enterprise agreement, before they are excluded from making an unfair dismissal claim against their organisation. This threshold applies under the Fair Work Act 2009 (Cth) and changes every year on July 1st. The following shows how much the threshold has increased every year:
- 2009-2010 – $108,300
- 2010-2011 – $113,800
- 2011-2012 – $118,100
- 2012-2013 – $123,300
- 2013-2014 – $129,300
- 2014-2015 – $133,000
- 2015-2016 – $136,700
- 2016-2017 – $138,900
- From 1 July 2017 to June 30th 2018 – $142,000
The high-income threshold under the Fair Work Act 2009 has increased to $142,000. This means that the maximum cap for unfair dismissal remedies (being 26 weeks pay) will increase to $71,000.
Modern awards will not apply to any employee who earns more than the high-income threshold.
If an unfair dismissal claimant is not covered by an award or enterprise agreement, and was earning greater than the high income threshold at the time of dismissal, then the employer may have a defence. However, any such defence must still be heard and argued before a representative of Fair Work Commission (FWC).
|From 1 July 2016
|From 1 July 2017
|National Minimum Wage||$672.70 per week
$17.70 per hour
|$694.90 per week
$18.29 per hour
|Modern Award Minimum Rates||2.4% increase
|Superannuation Guarantee||9.5% of ordinary time earnings
|9.5% of ordinary time earnings (unchanged)|
|Maximum super contribution base||$51,620 per quarter
|$52,760 per quarter
|High-income threshold (for the purpose of unfair dismissal claims and award application)||$138,900
|Maximum compensation for unfair dismissal||$69,450
|Penalty unit value||$180
|Maximum civil penalty under the Fair Work Act 2009 for a corporate entity||$54,000
|Maximum civil penalty under the Fair Work Act 2009 for an individual||$10,800||$12,600|
It is recommended that employers immediately seek legal advice once served with a Unfair Dismissal Claim so the lawyer can assess if any defences are available.