The second tranche of award rate increases for FY20/21 will commence from the first full pay period on or after 1 November 2020. Employers with employees covered by the modern awards affected by this change must ensure that they review pay rates to avoid the risk of underpaying staff.
Why are some award rates increasing on 1 November?
Back in June, the Fair Work Commission’s 2019/20 Annual Wage Review resulted in a 1.75% increase to the national minimum wage (NMW) and modern award rates. While the increase to the NMW was effective from 1 July 2020, the timing of the increases for award covered employees was staggered in recognition that the economic impact of the COVID-19 pandemic has not been consistent across all sectors.
Modern awards were grouped with reference to the impact of the pandemic on the relevant industry or occupation. Those modern awards covering industry sectors apparently affected less by the pandemic than others were classified as Group 1 and had their minimum rates increased along with the NMW on 1 July 2020.
The modern awards in Group 2 largely cover industry sectors that were adversely impacted by the pandemic, but not to the same extent as those classified as Group 3.
What awards are in Group 2?
There are 73 modern awards in Group 2, including:
- Animal Care and Veterinary Services Award 2020
- Architects Award 2020
- Book Industry Award 2020
- Building and Construction General On-site Award 2010
- Clerks—Private Sector Award 2010
- Food, Beverage and Tobacco Manufacturing Award 2010
- Graphic Arts, Printing and Publishing Award 2010
- Legal Services Award 2020
- Manufacturing and Associated Industries and Occupations Award 2020
- Mining Industry Award 2020
- Miscellaneous Award 2020
- Professional Employees Award 2020
- Real Estate Industry Award 2020
- Security Services Award 2020
A full list of the Group 2 modern awards can be found here. In our experience, most employers will find that they have employees covered by the Clerks – Private Sector Award 2010, which covers employees who are not otherwise covered by an industry-based award and who work in clerical roles. Examples of such include secretaries, executive assistants, receptionists, payroll or accounts officers, and even office managers. It can therefore be risky to assume an award does not cover any employees in your organisation.
What do I need to do?
If you have employees covered by a Group 2 award, you need to take the following action:
- If you pay your employees in accordance with the minimum rates under the relevant modern award, you will need to increase the employee’s wages by 1.75% from the first full pay period on or after 1 November 2020.
- If you pay your employees only slightly higher than the relevant modern award rate, you will need to reassess your employees’ salaries or wages to ensure they remain above the new pay rates.
If you require assistance determining the correct pay rates for your staff under a modern award, please contact McCabe Curwood’s Employment law team for assistance. Underpaying employees, even inadvertently, can have serious consequences in terms of penalties, so it’s best to ensure compliance at the earliest opportunity.