HR Tip - Annual Wage Review 2023-24 (What you need to know!)

Hey everyone! 👋

As many of you know, the Fair Work Commission recently completed its annual wage review for 2023-24. This review will affect all employees covered by Modern Award Minimum Wages (this includes the Social Community Home Care and Disability Services Industry Award) and the National Minimum Wage (generally for Award-Free employees). To help our HR Help Hub community navigate these changes smoothly, I’ve put together a quick guide with key points and actions for business owners and managers.

By way of introduction my name is Phil. I am a Senior HR Professional and the Founder of Human Power (HR & Talent Consultancy).

So, What Do You Need to Know?

Effective Date and Details:

• Effective Date: The new wage rates will kick in from 1st July 2024.

• Increase Details: The updated minimum wage rates have been outlined in the Fair Work Commission’s decision. You can check out the details here. (To save you some time, it’s a 3.75% increase on the current minimum rates.)

Actions Required

Let’s dive into what you need to do to ensure your business complies with these new changes.

1. Review Salaries (Annualised Wages) & Employees Paid Above Award Rates

If you have employees on annualised salaries with off-set arrangements or who are paid above award rates, it’s recommended to conduct a Better Off Overall Test (BOOT). This ensures that their total remuneration is higher than the minimum entitlements under the relevant modern award. Should the BOOT determine that wages/salaries are below the required minimum, you will need to complete a Pay Increase Letter informing the employee of the change to their remuneration effective from 1st July 2024. For wages/salaries that are above the new award rate, you may be able to absorb the increase.

2. Communicate with Your Employees

Prepare Personalised Pay Increase Letters:

You are required to notify your employees of changes to their employment, including changes to their remuneration (wages/salary). Sending a personalised letter to each affected employee about their new pay rate and the effective date is best practice and recommended. To save you some time, I’ve attached a general example of a pay increase letter template.

Staff Memos:

If sending individual letters isn’t feasible, you may opt for a staff-wide memo (compliant in some cases, particularly if all your staff are paid hourly wages at the minimum rate—but not recommended). I’ve also included an example memo template for this. Clear communication is key to ensuring everyone is on the same page.

3. Prevent Wage Underpayments

Recent legislative changes have criminalized wage underpayments, making it crucial to address these wage increases accurately and promptly. More information on these changes can be found here. Compliance isn’t just a legal requirement; it’s essential for maintaining a fair and ethical workplace.

4. Implementing the Changes

Using HR/Payroll Technology:

Having sufficient and capable HR/Payroll technology that can handle award interpretation is crucial. Manual adjustments can lead to admin errors, underpayments, and potential legal issues. They are also time-consuming, especially for larger workforces. For those without modern HR technology, ensure your calculations are accurate (increasing by 3.75% of current rates). Triple-check all calculations before they go live on 1st July 2024. Once the pay guide is live (accessible via the ‘Summaries’ section under the Award Viewer), verify your calculations again to ensure compliance. If there are discrepancies, inform your employee and make the required amendments—ensure any underpayment/overpayment is communicated with the employee.

Additional Considerations & Pro Tips

1. Review Employment Contracts: This is a great time to do a compliance audit. Review your employment agreements and ensure that they are fit for purpose. Do they include:

• Employment Type (full-time, part-time, casual)?

• Correct working hours?

• Correct working location/s?

• Outline the Award coverage (if applicable) and the classification & pay point of the role?

• Ensure all contract templates are up to date and reflect the new wage rates.

2. Notify Employees of Changes to Superannuation: While informing employees of the minimum wage increases, also outline the increase to the Superannuation Guarantee Scheme from 11% to 11.5% effective 1st July 2024.

3. Review and Adjust Payroll Systems: Review and, if required, update your payroll systems to reflect the new pay rates for eligible employees. Note: Sometimes tech can fail. Should this occur, you will be required to have checked and applied the appropriate rates for all staff.

4. Ensure Compliance: Use this opportunity to review and ensure compliance with all aspects of payroll, including award interpretation and leave calculations.

Example Templates Attached

To make your life easier, I’ve attached some example templates:

• Pay Increase Letter

• Staff Memo

If you need any assistance with implementing these changes or conducting the BOOT, don’t hesitate to reach out. Got questions? Include them below!

Was this helpful?

Need more Info?

Have suggestions for future posts?

Get in contact and let me know!! 😃

Best,

Phil

0 comments