On 30 May 2019 the Fair Work Commission announced that as of the first full pay period in July, the minimum wages in modern awards would increase by 3% (and so would the Federal minimum wage for award-free employees).
But does this mean that employers have to increase the wages of all employees by 3%? The simple answer is no. The minimum rates set out in modern awards are exactly that: minimum rates of pay. If you are already paying above the award then there is generally no obligation to increase wages just because the minimum wage has increased (unless the new minimum wage will now be greater than the rate you are paying).
Employers who pay “above the award” rates of pay in order to meet all the entitlements that arise under an award should ensure that the rate of pay is still sufficient to cover all entitlements that might arise under the award (e.g. overtime, allowances, etc.) now that the minimum rates have increased. Employers should also make sure that employment contracts clearly state that the employee's wage or salary covers all entitlements that arise under the award – to avoid an employee being entitled to an above the award rate of pay plus payment for overtime, allowances, etc.
Employers covered by an enterprise agreement should remember that the Fair Work Act 2009 states that if the base rate of pay in an enterprise agreement is overtaken by the base rate of pay in a modern award that would otherwise apply to the employee, then the employer must pay the award base rate of pay, rather than the rate stated in the enterprise agreement. NB this obligation to match the award rate only arises in relation to base rates of pay. There is no obligation for the overtime or penalty rates in an enterprise agreement to “keep up” with the award rate of pay (unless the enterprise agreement has specifically provided for this).
National Minimum Wage IncreaseThe Fair Work Commission has handed down its decision to increase the national minimum adult wage by 3%. This increase will be applicable from the first full pay period commencing on or after 1 July 2019.
The new adult National Minimum Wage will be $740.80 per week or $19.49 per hour. This constitutes an increase of $21.60 per week to the weekly rate.
No changes take effect until the first full pay period on or after 1 July 2019. However, all employers should refer to the appropriate awards covering their employees.
To find out what is required to update your software, please call us.
What do I need to do?
Single Touch Payroll reporting will take effect from 1 July 2019.
All necessary payroll information, such as wages & salaries,
(PAYG) withholding and super information, will be reported to the ATO
when you pay your employees.
If you have existing payroll or accounting software, it should offer updated ‘Single Touch Payroll’ reporting. However, if it’s not an option speak to your software provider or Boox for when their product will be ready.
What does it mean?
What you need to do
Single Touch Payroll (STP) is a tax and super information reporting change that all employers must adhere to by 1 July 2019.
The new ‘real-time’ reporting method via STP will send employee tax and super information direct to the ATO each time you are paid.
This change will have little effect on employees directly. However, there are a few changes to be aware of.
What does this mean for you?
Year-to-date tax and super information will be available to you through myGov.
Payment summaries will be available in myGov
You can check if your super has been paid.
Boox the Bookkeeping Experts are specialists in all bookkeeping fields and are available to help you understand and implement these changes. Contact us to help you make the transition.