The 2024-25 Annual Wage Review (AWR) decision was handed down this week by an Expert Panel of the Fair Work Commission and it looks like mixed news for employers.
The Expert Panel, comprising of a record number of women, decided to increase the national minimum wage and modern award minimum wage rates by 3.5%.
Factors that were cited in support of this increase include the need to ensure that effects of exaggerated inflation during the pandemic period are “not permanently embedded” in the real value of Australia’s wages. The Expert Panel noted that factors including the upcoming increase to the Superannuation Guarantee contribution rate operated as moderating factors on this increase.
Although this increase is more moderate than some recent years, it will nonetheless place pressure on many Australian businesses over course of the upcoming year. The Expert Panel accepted that it appears as if inflation is returning to its pre-pandemic level and there are indicators of a seemingly less favourable global economic forecast, “caused by changing US trade policies.” While such an acknowledgement may be foreshadowing the end of the larger minimum wage increases that have been seen in recent years, only time will tell.
The wage increases will take effect from the first pay period on or after 1 July 2025, with determinations varying relevant modern awards to be published over the coming days.
Employers should review the wages for any award-covered employees in their business, and also review any offsetting arrangements that are used on the basis of these increased rates ahead of 1 July 2025.
Further Gender Undervaluation Review
The Expert Panel also foreshadowed a further tranche of its gender undervaluation review of modern awards, following the review of priority awards identified in last year’s AWR decision. This further review will focus on professional classifications in modern awards (classifications that require a university degree) on the basis that that 69.7% of award-covered, university-trained employees, are female.
The Expert Panel has announced that the Fair Work Commission will commence proceedings on its own motion to review professional classifications in modern awards in due course.
While this review has not yet been commenced, the Expert Panel published a provisional list of 22 modern awards with professional classifications that it proposed would be included in this review.
The awards that are included on the list may be subject to change once the review proceedings have been initiated. Employers with employees in professional classification levels should monitor this review and any outcome that increases award wage rates for these classifications.
The following awards have been included:
- Airport Employees Award 2020
- Ambulance and Patient Transport Industry Award 2020
- Animal Care and Veterinary Services Award 2020
- Architects Award 2020
- Black Coal Mining Industry Award 2020
- Book Industry Award 2020
- Broadcasting and Recorded Entertainment Award 2020
- Educational Services (Post-Secondary Education) Award 2020
- Educational Services (Schools) General Staff Award 2020
- Electrical Power Industry Award 2020
- Higher Education Industry—Academic Staff—Award 2020
- Higher Education Industry—General Staff—Award 2020
- Hydrocarbons Field Geologists Award 2020
- Legal Services Award 2010
- Live Performance Award 2020
- Local Government Industry Award 2020
- Medical Practitioners Award 2020
- Professional Employees Award 2020
- Rail Industry Award 2020
- State Government Agencies Award 2020
- Surveying Award 2020
- Water Industry Award 2020
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