Your 2025 EOFY Compliance Update
At the time of writing this article, the Fair Work Commission has recently handed down its decision following the Annual Minimum Wage Review process. The process involves the Commission reviewing submissions from various interested parties, including employer and employee representative groups, as well as analysing data relating to wages, such as changes to cost of living and alike.
What is The Annual Minimum Wage Review
Essentially, they are looking to ensure that the minimum wages set out in the Fair Work Act, including the National Minimum Wage, as well as al Award minimum rates of pay, is set at an appropriate level for our current economic conditions.
What Else is Changing
In addition to the National Minimum Wage and Award Rate changes, we are in still the midst of a raft of changes to Industrial Relations legislation, which applies to not only wages, but various other aspects of the employment relationship.
Keeping up with compliance obligations is one of the key pain points employers face, especially in this current environment with so many changes, many of them complex to navigate.
In this article we’ll give you the current update, with the caveat that more changes are tabled, and this information is only up to date at the time of writing (June 2025).
Your 1 July Compliance Essentials
To ensure you’re compliant from 1 July 2025, here are some key things you need to be aware of:
- From 1 July 2025 the National Minimum Wage increases by 3.5%, meaning the new minimum wage will be $948 per week or $24.95 per hour. So if you have minimum wage employees in your business, their wages need to increase from the first pay period on or after 1 July 2025;
- From 1 July 2025 all Modern Award minimum rates of pay will increase by 3.5%. If you have employees who are paid under Award minimum rates of pay these will need to increase by 3.5% from the first pay period on or after 1 July 2025.
- Allowances and penalties detailed in Modern Awards will also be adjusted, and will be updated accordingly.
- From 1 July 2025 the compulsory superannuation guarantee contribution made by employers to eligible employees increases from 11.5% to 12% - so your super payments will be increasing from 1 July.
Additional Checks
These are not insignificant increases and changes, so employers should also ensure they are reviewing Individual Flexibility Agreements and Annualised Wage Agreements which are already in place to ensure they are still meeting the better off overall test.
Typically, employers will have these in place if they pay their employees a higher hourly rate or annual salary, which includes their base rate of pay as well as allowances, penalties, loadings and alike. Failure to review these agreements annually can easily see an employer slip into an underpayment scenario, placing you at risk of back payment claims being made. So as your relevant Award increases, it’s the time to assess your flexibility agreements to ensure you remain compliant.
One common way employers can fall short of meeting the better off overall test is by not understanding, having updated or correctly applying allowances. The misconception that just because you pay above Award, you don’t need to worry about allowances is simply untrue. If you’re not paying the correct allowances, and you don’t have the correct documentation in place to allow for that, you are putting your business at significant risk of an underpayment claim being bought against you.
Upcoming Changes
These are not the only compliance changes employers need to be aware of. With the Closing the Loopholes Act provisions still continuing to be implemented, August 2025 marks further significant deadlines.
Specifically this relates to the requirement for the Right to Disconnect laws to be implemented across all small businesses, defined by those employing 14 or fewer employees. This represents a significant number of employers across Australia, many of whom are significantly underprepared for these changes, and how they might impact their business operations.
In addition, many employers are still behind in implementing the changes that have been rolled out in the last 2-3 years when it comes to being compliant with their Industrial Relations obligations, so there is still some catch up required.
What Employers Should Do:
Ensure you are across your specific compliance obligations by understanding the Fair Work Act and associated legislation as it applies to your business and your employees, or get support from a professional to assist you with this.
An invitation:
Another way you can stay up to date with the latest compliance updates is to join us inside our free Facebook Group. It’s a great place to connect with other business owners, leaders and managers in a group focused on all things HR, people and team management we’d love for you to join us.
