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How will the Annual Wage Review Decision affect me?

Fair Work Australia recently handed has down its Annual Wage Review Decision for 2012.

In summary, the decision from Fair Work Australia means that all Modern Award rates of pay are to be increased by 2.9%, with commensurate increases in hourly rates on the basis of a 38 hour week. The increase is to be effective from the first full pay period commencing on or after 1 July 2012.

The increase also applies to minimum wages for junior employees, employees to whom training arrangements apply and employees with disability.

The absorption clause in modern awards allows for the increase to be absorbed into any existing over award payments.

If you are transitioning rates to a Modern Award, then the minimum rates of pay will be calculated by adding or subtracting 40% (was previously 60%) of the transitional amount.

The national minimum wage order will contain a national minimum wage of $606.40 per week or $15.96 per hour and if you employ award-free casual employees, the default casual loading will increase from 22% to 23%, effective from the first full pay period on or after 1 July 2012.

The new Modern award minimum rates will be adjusted and published as soon as practicable.

If you require assistance with modern award coverage or modern award rates (including calculation of transitional rates), please don’t hesitate to contact our Employment Law Team.


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