5 August 2020

Minimum wage increases by 1.75%

An increase to the minimum wage of 1.75% started rolling out from the first full pay period from 1 July 2020.

The increase applies to minimum rates in awards in 3 stages:

• Group 1 Awards - from 1 July 2020
  • Frontline Heath Care & Social Assistance Workers
  • Teachers and Child Care
  • Other Essential Services
    
    
• Group 2 Awards - from 1 November 2020
  • Construction
  • Manufacturing
  • A range of other industries
    
    
• Group 3 Awards - from 1 February 2021
  • Accommodation and Food Services
  • Arts and Recreation Services
  • Aviation
  • Retail
  • Tourism

You can find the full list of impacted Awards on the Fair Work Ombudsman’s website.

For anyone not covered by an award or an agreement, the new national minimum wage of $753.80 per week or $19.84 per hour, applies from the first full pay period starting on or after 1 July 2020.

The minimum wage increase does not impact on workers receiving above the minimum wage.

For employees at or close to the minimum wage, it is essential that employers are aware of the impact and timing of the increase to avoid falling foul of their industrial and superannuation obligations.

Increased flexibility for Parental Leave Pay for self-employed

From 1 July 2020, parents accessing the Government’s parental leave pay (PPL) scheme now have greater flexibility and options.

Targeting the self-employed and small business owners, the changes introduced a new flexible paid parental leave pay period of 30 days.

Previously, new parents could apply for PPL for a continuous block of up to 18 weeks. The changes split this time period into two:

• A continuous period of up to 12 weeks, and
• 30 flexible days.

Parents can take the 18 weeks in one block or, under the new rules, take the 12 week period and then use the additional 30 days at a period and in a way that suits them but before the child turns 2 years of age. For example, assume that when Jane, who works five days per week, has a child, she initially claims 12 weeks. Jane returns to work part time for three days per week. In that case, Jane would apply to be paid parental leave pay on the two days per week that she is not working.

The administration of the PPL will change in some scenarios. For Jane’s case above, the employer would administer the scheme for the first 12 weeks but then the Government would directly pay Jane for her flexible days.

If an employee wishes to access flexible parental leave pay, they will need to negotiate time off work or a part time return to work with their employer. If the employer is unable to accommodate the request, then the employee may take the 18 weeks as one block.

The changes to the paid parental leave scheme apply to babies born on or after 1 July 2020. The scheme commences from 1 April 2020 to give parents applying for leave the flexibility to use the new arrangements (but only if their child is born on or after 1 July 2020).