2016 National Minimum Wage Increase

ESV MG 3273 3

2016 National Minimum Wage Increase


The Fair Work Commission recently handed down their decision to increase minimum wages by 2.4% as part of their annual wage review.


The increase comes into effect from 1 July 2016 and applies to employees covered by the national minimum wage, a modern award or in some cases, a registered agreement.


The new national minimum wage will increase to $672.70 per week or $17.70 per hour based on a 38 hour week. There will be no change to the casual loading rate of 25% which applies to Modern Awards as well as Award/Agreement free employees.


The Fair Work Commission stated the decision will affect more than 1.86 million employees in Australia.


Employers should prepare for the increase by conducting an audit of their employees’ salaries and wages in the lead up to 1 July 2016.  Key items to consider in this review include:

  • If employee’s fall below the new minimum wage, they will require an increase.  Increases are effective from the first full pay period on or after 1 July.
  • If you already pay above award rates, you may not be required to increase employee’s wages provided they continue to be paid above the new minimum wage.
  • Weekly wages for employees on a Modern Award must be rounded to the nearest 10 cents.
  • Check annualised salary arrangements and registered agreements to ensure employees will continue to be paid sufficiently, giving consideration to the new minimum wage entitlements and their ordinary hours of work.


If you are uncertain what industrial instrument governs your employee’s minimum wage entitlements refer to the Fair Work website or seek legal advice.


It is important to review your HR practices regularly to ensure they are compliant with the Fair Work Act and other applicable regulatory instruments.  If your business has policies and processes that have been ticking along for some time without review, it might be time for a HR health check.


If you would like more information around integrating HR best practice with your organisation’s strategic objectives, please contact ESV’s HR Manager Danica Burns on 9283 1666.