3.5% Wage Increase - Who does this apply to?

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The Fair Work Commission has announced a 3.5% increase to minimum wages following its Annual Wage Review, with weekly wages to be rounded to the nearest 10 cents.

Who does the increase apply to?

The pay increase will apply to employees who are covered by a (federal) modern award, such as the Nurses Award 2010

If you have an enterprise agreement in place and the rates of pay are supposed to increase in accordance with the rulings of the Fair Work Commission or any of its predecessors (i.e. the Australian Fair Pay Commission), then your rates of pay should also increase.

If you work in the private sector and the rates in your enterprise agreement are not scheduled to rise with the Annual Wage Review decision, your employer should still ensure that you are receiving at least the base rate of pay prescribed by the applicable classification in the relevant modern award, irrespective of the rate in your enterprise agreement (in other words, if the base rates of pay in your enterprise agreement are less than the base rates in the modern award, then your pay should increase to at least the base rate in the modern award as it is illegal to pay less than the base rate in the relevant modern award).

The base rate of pay means the rate of pay payable to an employee for his or her ordinary hours of work, but does not include:

  • incentive-based payments and bonuses;
  • loadings;
  • monetary allowances;
  • overtime or penalty rates; and
  • any other separately identifiable amounts.

The increase affects minimum base rates of pay only, so if you who are already being paid more than the new base rate of pay your employer does not necessarily have to increase your pay in line with the 3.5% wage increase. However, now would be the perfect opportunity to negotiate a wage increase.

The pay increases do not apply to public sector industrial instruments, such as Queensland Health’s:

  • Nurses and Midwives (Queensland Health and Department of Education and Training) Certified Agreement (EB9) 2016; or
  • Nurses and Midwives (Queensland Health) Award – State 2015.

Therefore, if you are a public servant, your pay is unlikely to be affected by the Fair Work Commission’s decision to increase wages by 3.5%.

When will the pay increase commence?

The 3.5% wage increase will apply from the first full pay period starting on or after 1 July 2018.

For example, if your pay cycle is from Monday to Sunday, the first full pay period will commence on Monday, 2 July 2018.

What does a 3.5% wage increase look like?

The Fair Work Commission has released draft determinations adjusting the minimum wages for each modern award. Although these are still subject to review and public feedback, it is anticipated that the pay increases under the Nurses Award 2010 will be as follows: