Important Notice: Employers, Labour Hire Providers, and Host Employers – The National Minimum Wage Increase and How It Affects You

It is important for providers and hosts to be compliant with workplace laws and workers are being paid correctly. Providers who fail to comply with workplace laws risk having their license reviewed, suspended, cancelled or have conditions placed on it.

Labour Hire Authority

Annual Wage Review

The Fair Work Commission has made significant announcements in the aftermath of the 2022 Annual Wage Review.

Key Changes as of 1 July 2022

National Minimum Wage increase

Award minimum wage increase

Casual workers

National Training Wage increase

Registered agreements

High-income threshold and compensation cap

Superannuation changes

Social, Community, Home care and Disability Services (SCHADS) Award changes

End of unpaid pandemic leaves in awards

Fair Work Ombudsman

The National Minimum Wage increase

The national minimum wage has increased to $21.38 per hour (up from $20.33) or $812.60 per week (up to $40 from $772.60) for a full-time worker working a 38-hour week. This raise will be effective the first full pay month an employee receives on or after 1 July 2022.

• The weekly National Minimum Wage will rise by $40.00.
• The new weekly National Minimum Wage will be $812.60, or $21.38 per hour.

Award Minimum Wage increase

A full-time employee’s 38-hour work week will be used to calculate the 4.6 per cent increase in award minimum wages, subject to a minimum increase of $40 per week for award classifications. If you are covered by a registered agreement, you should check it to see whether this increase affects you.

If you are covered by an award, award increases happen in two stages:

1. Most awards will increase from the first full pay period on or after 1 July 2022.
2. For 10 awards in the aviation, hospitality and tourism industries, the increase will commence on 1 October 2022.  A list of these awards can be found here –1 October 2022 minimum wage increase.

This means minimum award wages:

• Above $869.60 per week, we will get a 4.6% increase.

• Below $869.60 per week, we will get a $40 increase.

Casual workers

To qualify for the national minimum wage, casual workers must be paid a minimum of $26.73 per hour, which includes their 25% casual loading.

National Training Wage increase

Increases in trainee pay under the National Training Wage This includes awards that mention or include provisions from Schedule E of the Miscellaneous Award, which goes into effect on July 1, 2022.

More information can be found here – Trainee Rates in the National Training Wage Schedule.

Registered agreements

The minimum wage increase may apply if you are covered by a registered agreement. This is because the base pay rate is a registered agreement and cannot be less than the base pay rate in the applicable award. More information can be found in our Library article Annual Wage Reviews and Registered Agreements.

Check your agreement by searching for it on the FWC website: Find an agreement.

High-income threshold and compensation cap

These employees are still protected by the Fair Work Act’s minimum working conditions and protections, including the National Employment Standards. Each year, the high-income threshold is reviewed. Find out more at Award & agreement free wages and conditions.

The compensation cap is the maximum amount that the Fair Work Commission can order an employer to pay in an unfair dismissal case. The cap is set by the Fair Work Regulations and changes on 1st July each year.

From 1 July 2022:

• the high-income threshold will be $162,000
• the compensation cap will be $81,000.

When an employee earns more than the high-income threshold:

• the relevant award doesn’t apply to them anymore
• they are no longer eligible to apply to unfair dismissal claims through the Fair Work Commission.

Superannuation changes

There are also changes to superannuation (super) taking effect from 1 July 2022. This includes the:

• removal of the $450 super guarantee threshold – go to the Australian Taxation Office (ATO) website to learn more about this change: Removing the $450 per month threshold for super guarantee eligibility 

• increase in the super guarantee rate from 10% to 10.5% – visit the ATO website to learn more about this increase: Get ready for super changes from 1 July.

If you want to understand your super obligations or entitlements, go to ATO – Super 

Social, Community, Home care and Disability Services (SCHADS) Award changes

For employees covered by the SCHADS Award, there are significant new award provisions applying from 1 July. This includes:

• minimum payments for some casuals and part-time employees
• broken shifts and broken shift allowances
• laundry and damaged clothing allowance
• remote work.

Find out more: 1 July 2022 changes to Social, Community, Home care and Disability Services Award.

End of unpaid pandemic leaves in awards

Unpaid pandemic leave provisions in awards are no longer applicable after June 30, 2022.

Note: The Albanese government is currently considering reinstating pandemic payment until September 30, 2022.

• Employees covered by affected awards could previously take up to two weeks’ unpaid pandemic leave if they were unable to work due to COVID-19.

• Any unpaid pandemic leave that began before June 30, 2022, can be extended. New periods of leave, however, cannot begin after June 30, 2022.

• Employers and employees should instead consider alternative leave options. Check what previously applied. Unpaid pandemic leaves in awards.

Wage Increase Examples

To understand how this wage increase will work in practice, consider the following examples:

Employees earning less than $869.60

John is a full-time employee working under the Manufacturing Award. .John’s weekly minimum wage before 1 July 2022 is $772.60. As this weekly wage is below $869.60, he will receive a $40 increase in his weekly wage from 1 July 2022.

Fair Work Ombudsman

Employees earning above $869.60

Hannah is a trade-qualified employee working under the Manufacturing Award. She works at a higher level of C10. Hannah’s weekly minimum wage before 1 July 2022 is $899.50. As this weekly wage is above $869.60, her weekly wage will increase by 4.6% from 1 July 2022.

Fair Work Ombudsman

Free Online Resources

Employers can calculate your new pay rates by using the tools below:

• employers can use the Pay and Conditions Tool to calculate your new rate of pay
• go to our Pay guides page to access the updated pay guide for your award.

Most employees are covered by an award. Awards are legal documents that outline the minimum pay rates and conditions of employment.

Workers can find your award or coverage, you can:

• use the 3-step Find my award tool to check what award you’re covered by
• visit the List of awards page to access the new pay rates for your award.

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