Following its initial decision of 26 October 2006 (effective from 1 December 2006), the Australian Fair Pay Commission (AFPC) made its second annual determination of minimum wage rates on 5 July 2007 (2007 Decision).
The 2007 Decision has resulted in a two tiered minimum wage increase which applies to employees covered by the Workplace Relations Act 1996 (Cth).
Effective from the first pay period on or after 1 October 2007:
- the Standard Federal Minimum Wage (SFMW) increases by $0.27 per hour ($10.26 per week), and
- the Australian Pay and Classification Scale (APCS) increases as follows:
- for APCSs up to and including $700 per week, by $0.27 per hour ($10.25 per week), and
- for APCSs above $700 per week, by $0.14 per hour ($5.30 per week).
The increases flow on to junior employees, employees under training arrangements, employees with a disability and casual employees.
The 2007 Decision increases generally will not apply to:
- employees covered by Australian Workplace Agreements (AWAs) or pre-reform certified agreements approved before 27 March 2006
- employees covered by Preserved State Agreements
- employees who remain covered by State industrial relations systems, or
- employees covered by the 5 year transitional federal award system.
Employees covered by AWAs or a collective workplace agreement made since 27 March 2006 must be paid at a rate that is at least equal to the SFMW or the relevant APCS, as increased in the 2007 Decision.
In addition, the AFPC has granted:
- farm businesses in receipt of an Exceptional Circumstances Interest Rate Subsidy a deferral of 12 months for compliance with the increases (this does not, however, preclude these farm businesses and employers from paying the 2007 minimum wage increase), and
- an exemption from the 2007 Decision to employers covered by the New South Wales Social and Community Services Employees (State) Award 2006.
The AFPC also announced:
- it will conduct regular wage reviews each year and announce the minimum wage decision in July each year, which will be implemented in October each year, and
- that it is in the process of creating and publishing new APCSs.
Implications for employers
As the 2007 Decision increases become effective from the first pay period on or after 1 October 2007, employers covered by the Workplace Relations Act 1996 (Cth) will need to ensure that their relevant employees are paid at least the new relevant minimum wage increases. Failure to comply with the minimum wage could result in a penalty of up to $33,000 per breach as well as the recovery of the underpayment amount for the employee.
