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3.5% minimum wage hike takes effect this Sunday

Adam Zuchetti
Adam Zuchetti
25 June 2018 1 minute readShare
Growth, chart, graph, increase

Employers of all industries are being reminded that the new minimum wage and award wage rates take effect from this Sunday as we tick over into the new financial year.

Early this month, the Fair Work Commission announced a surprise 3.5 per cent increase in the minimum wage and corresponding award wages, putting an extra $24.30 per week into the pay packed of Australia’s lowest paid workers.

Once the increase takes effect, employers will be bound to pay a national minimum of $18.93 per hour.


At the time of the announcement, workplace advisory firm Employsure warned that many employers, particularly small businesses, would feel a significant pinch from the increase.

“We have significant consultations with small businesses and the overwhelming view is that this increase will affect their bottom line significantly,” the group’s senior employment relations adviser, Josh Vikis, said.


“Since small businesses employ majority of the Australian workforce and generate a fifth of our GDP, it is vital that they are provided with sufficient support to remain profitable whilst spurring growth.”

Mr Vikis added: “Australia has high wages and high living standards. Our minimum wage is one of the highest in the world.”

He questioned the need for such a sizeable increase. Core inflation is currently sitting at just 1.9 per cent.

Yet the commission shrugged off criticism, noting that “[business] profits grew by 4.3 per cent in 2017”.



“We remain of the view that modest and regular minimum wage increases do not result in disemployment effects, or inhibit workforce participation,” the commission said.

Regardless, the increase will soon take effect, meaning employers need to be prepared.

“If you already pay above award rates, you may not be required to increase your employees’ wages, provided the rates you pay are above the increased minimum award rates (and you are not required to increase employees’ wages under their contracts of employment or applicable enterprise agreement),” said Mr Vikis.

But for those who are affected, he suggested that an adjustment to existing business models will be needed to meet the higher wage bills.

“Some businesses simply need to reduce their profit targets and take their extra payroll costs from their profits. Businesses that already operate on tight profit margins need to find money in other places,” he said.

3.5% minimum wage hike takes effect this Sunday
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016. 

The two-time Publish Awards finalist has an extensive journalistic career across business, property and finance, including a four-year stint in the UK. Email Adam at [email protected]

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