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Businesses must comply with minimum wage increase

Businesses that hire employees at the minimum wage will need to note that the Federal Minimum Wage has increased by $19.40 per week for those not on award wages and up to $38 per week for those who are, starting from the first full pay period on or after 1 July 2011.

Default casual loading for award/agreement free employees has also increased, from 21% to 22%, although the standard casual loading for modern awards remains at 25%.

After considering submissions about the proposed wage rise from industry bodies and other interested parties, Fair Work Australia announced the increase last week.

The Australian Council of Trade Unions (ACTU) had pushed for a rise of $28 per week, while businesses protested the imposition of a $3 billion increase in wages in the the next year. Fair Work Australia opted for a 3.4% rise instead of imposing a dollar increase.

Minister for Tertiary Education, Skills, Jobs and Workplace Relations Chris Evans said it was a balanced decision: “We think this is a good decision, it recognises the economy is still strong, it recognises the growth in employment.”

Economists suggested that the wage rise would prompt the Reserve Bank to raise rates at its next meeting tomorrow.

Businesses unsure about their obligations should seek legal advice.

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Adeline Teoh

Adeline Teoh

Adeline Teoh is a journalist with more than a decade of publishing experience in the fields of business, education, travel, health, and project management. She has specialised in business since 2003.

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