Your EOFY Compliance Update

blog Jun 27, 2024

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 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 2024).

 

Your 1 July Compliance Essentials

To ensure you’re compliant from 1 July 2024, here are some key things you need to be aware of:

  • From 1 July 2024 the National Minimum Wage increases by 3.75%, or about $33 per week - so if you have minimum wage employees in your business, their wages need to increase from 1 July;
  • From 1 July 2024 all Modern Award minimum rates of pay will increase by 3.75%. If you have employees who are paid under Award minimum rates of pay these will need to increase by 3.75% from 1 July.
  • Allowances and penalties detailed in Modern Awards will also be adjusted, and will be updated accordingly.
  • From 1 July 2024 the compulsory superannuation guarantee contribution made by employers to eligible employees increases from 11% to 11.5% - so your super payments will be increasing from 1 July;
  • A new, updated, Fair Work Information Statement will apply from 1 July, so employers need to ensure they are providing the most up to date version of this Information Statement to new employees commencing on or after 1 July 2024;
  • Also, from 1 July 2024 there are further changes to the Parental Leave Pay Scheme, with the payment increasing from 100 days to 110 days, with the current flexible model of taking this leave remaining in place;
  • In addition, Union Officials right of entry rules are changing and expanding, especially in relation to the investigation of underpayment claims.

 

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.

 

Upcoming Changes

These are not the only compliance changes employers need to be aware of. With the Closing the Loopholes Act provisions starting to role out, August 2024 will mark a significant number of additional compliance obligations including:

  • Changes to the definition of casual employment, updated obligations around The Casual Employment Information Statement and changes to the casual conversion pathway;
  • The introduction of The Right to Disconnect laws;
  • A definition of ‘employee’ and ‘employer’ being inserted into the Fair Work Act, further clarifying the difference between employees and contractors. This is a particularly important area for employers to understand to ensure they get the engagement right from the outset to avoid penalties;
  • Changes to entitlement for Gig Economy and Road Transport Workers.

 

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. Each week I am proving free training and updates in the group, so you’ll be alerted any time there is something new. Plus, 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. https://www.facebook.com/groups/hrsupportaustralia

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Discover the key compliance essentials (and latest changes) every business needs to know to ensure they are protected and don’t end up in hot water with Fair Work – even if you only employ 5 staff and one of them is your sister in law.