Wage review decision made for 2024

The fair work commission has announced a minimum wage increase of 3.75% from July 1 2024.  This applies to the national minimum wage and all modern awards.

As employers what do you need to do;

1. Determine if you have any employees currently paid the national minimum wage, or are paid under a modern award at the minimum rates. Factor the 3.75% into your wage numbers from the 1st July.

 2. Determine for those employees who are paid more than the current minimum rate (because you have always paid them more than the minimum), when on applying the 3.75% they are no worse off.  

3. Check all of your annualised salary employees and make sure you apply the 3.75% to your calculations.  If on applying the 3.75% you have people worse off, you will need to factor in the amount to ensure their salaries meet or exceed the minimum requirements.

Your payroll officer, accountant, bookkeeper or  finance manager should be able to assist in carrying out the typical calculations to determine who requires the 3.75% pay increase from July 1st.

You are not obliged to pay 3.75% increase to those who are paid well above an award or the minimum wage.

 Although most employers use this as a guide.  There are a number of considerations for you as the business owner when it comes to wages and salaries.  Typically, at this time of year, employees are expecting a pay increase, or at the very least, a conversation around their wages and salaries.   Every business is different.  As you prepare to finalise budgets and forecasts and give consideration to wages and salaries, for the next 12 months, think about some of these factors;

• Your turnover this year and your forecasted turnover next year

• Predicted profits

• Super increases to 11.5% from the 1st July

• Payroll tax - if you have a payroll over a certain amount, you will be paying an additional amount . Speak to your accountant to determine what it is for your business.  Each state or territory is different.

• Changes to roles and responsibilities

• Recruitment, is it hard to find people in your industry?

• Salary increases given mid year?

• The cost of living, it is affecting everyone?

• Inflation numbers - predicted at 3%

• Retention and engagement (why do people work for you?)

If you are only able to give a small increase, or unable to give a pay increase at all there may be other ways to incentivise or maintain engagement.

• revisit flexible working and negotiate arrangements that may be mutually beneficial (work from home day to avoid travel costs)

• share with the team other benefits and incentives in your business that you will continue to provide, such as monthly bbqs, professional development, salary sacrificing,  wellness programs.

• share a new incentive that may be low cost but could boost morale and or work-life balance but not break the bank.

• remind your employees about tax cuts from 1st July.  they will be taking home more money regardless of a pay increase.

• organise training - lots of people are really interested in learning and expanding their skills and knowledge and value this more than a pay increase.

• Are there opportunities to pay a bonus or increase at some stage, based on improved turnover or profits.  You may not be able to promise this but agree to revisit in say, 3-6 months.

The number one thing to do during this time, regardless of your decisions around salaries and wages……

Communicate! Communicate!

Be prepared to discuss all situations and scenario's with your employees.  Be transparent and authentic.  This is the perfect time for a one to one check in.  Each person will have different circumstances and taking the time to find out what these could be, may make all the difference.

If you have any concerns or need support to get this right, reach out for a chat.