June 2, 2022

Prepared for a wage cost increase?

The minimum Award rates increase in July each year. As an employer you should be aware of this. It happens every year (with a few exceptions over Covid). We have come to expect increases of anywhere between 2.5% and 3.5%. However this year there is a realistic expectation that the increase will be higher, now we don’t have a crystal ball but it is reasonable to expect a hike of  between 4% and 5% . The unions are pushing for 5.5%, the Australian Industry Group 2.5%.  

The Labor government made an election  commitment to lobby for a 5% increase and we know we are in a time of under employment. The Prime Minister Anthony Albanese wrote to the Commission as part of this commitment (you can view the letter here).

The increase takes a range of factors into consideration including inflation and cost of living. So although we can sit and analyse and debate until the announcement is made we are all  just speculating. However these are things we know for sure:

  • There will be an increase to the minimum rates to all Awards in July
  • Employer Superannuation contributions are going up to 10.5%
  • Even if your employees are paid above minimum rates we are expecting significant media coverage on wage increases this year so be prepared for staff to ask for a raise – make sure that your staff are productive
  • “Wage theft” or under paying your staff is a hot topic  and a path you do not want to go down – have a look at our webinar about Payroll “It’s set and forget” here
  • There have been significant changes in a number of Awards to salary staff wage calculations and inclusions
  • Ensure that you have Employment Contracts in place - https://www.hrdynamics.com.au/article-posts/what-to-include-in-an-employment-contract
  • STP2 is not going away, and time is ticking for you to be compliant - https://www.hrdynamics.com.au/article-posts/single-touch-payroll-phase-2-are-you-compliant

We cannot stress strongly enough how important this time of year is for employers to check that they are meeting their obligations and are aware of their HR compliance obligations. This is something you want to be on the front foot with to avoid any nasty and costly surprises.

Don’t be a set and forget employer, be prepared and get HR Dynamics to assist your business in meeting your Fair Work obligations. Get in now for EOFY savings. Contact phoebe@hrdynamics.com.au

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