Work choices: Australian minimum wages

Last updated: December 2020 | 3 min read

What is a minimum wage?

The minimum wage is an employee’s legal lowest rate of pay for ordinary hours worked.

Employers and employees cannot agree to a rate of pay that is less than the applicable minimum wage.

How much it is for any particular employee depends on under what basis they are employed. Rates differ if you are employed under a modern award, an enterprise agreement, a transitional pay scale, or a national minimum wage order.

Under the 2018 Order, rates of minimum pay have increased by 3.5%.

The national minimum wage has increased to $18.93 per hour or $719.20 per 38 hour week (before tax).

Casual employees should be given at least a 25 per cent casual loading.

How is the minimum wage set?

The minimum wages received by employees in the national workplace relations system are reviewed by Fair Work Australia annually, with any adjustments taking effect on 1 July each year.

An Expert Panel of Fair Work Australia comprising of the president, three other full-time members and 3 part-time members considers “minimum wages objectives” and the “modern awards objectives” every year. They also review some transitional instruments created under the Fair Work (Transitional Provisions and Amendments) Act 2009.

Any determinations made to vary minimum wages in modern awards or a national minimum wage order apply from the first full pay period on or after 1 July each year.

From 1 January 2010, modern awards have replaced most existing awards and transitional pay scales, and contain the minimum terms and conditions for employees in particular industries and occupations.

The national minimum wage order must set the following wages for award or agreement-free employees:

  • a national minimum wage
  • a special national minimum wage for
  • trainees, apprentices and junior employees
  • employees to whom training arrangements apply
  • employees with a disability
  • a casual loading.

Not paying a modern award or the NMW

An employer must not contravene a term of a modern award or a national minimum wage order.

Suspected contraventions will be investigated and enforced by the Fair Work Ombudsman. A contravention of a term of a modern award or a national minimum wage order may result in penalties of up to $12,600 for an individual and $63,000 for a corporation. The penalty rate will remain unchanged until 1st July 2020.

For updated minimum wages rates here visit here 

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