National Minimum Wage and Modern Award Increases
Earlier this month Fair Work Australia conducted its Annual Wage Review and increased the national minimum wage by 3.4% to $589.30 per week (or $15.51 per hour). This decision also affects minimum rates and allowances applicable in Modern Awards.
The minimum wage and Modern Award increases will take effect from the first full pay period on or after 1 July 2011.
Employers should review their pay rates to ensure that all staff are being paid (at least) the national minimum wage or the minimum rate established by any relevant Modern Award. Significant penalties can apply for failure to pay minimum rates.
Paid Parental Leave Scheme
The federal government’s paid parental leave (PPL) scheme commenced on 1 January 2011, and provides for up to 18 weeks’ payment at the federal minimum wage ($589.30 as from 1 July 2011) to eligible employees.
To date Centrelink’s Family Assistance Office (FAO) has made payments to eligible employees. However, from 1 July 2011, employers are – in most cases - required to administer payments to eligible employees through their own payroll processes.
The FAO will still determine whether an employee is eligible for PPL, and will transfer the appropriate funds to the employer’s bank account. The employer is required to:
- distribute the funds received from the FAO to the eligible employee in accordance with the usual pay cycle;
- within one working day of the payment being made to the employee - provide the employee with written notice of the payment, including certain mandatory information (similar to obligations in relation to normal payroll records);
- make and keep records of such payments for seven years; and
- notify the FAO in writing of any relevant changes in circumstances.
Compulsory superannuation contributions are not required in relation to PPL and the payments made are not taken into account for payroll tax and worker’s compensation levy purposes.
Employers will need to ensure that appropriate accounting and payroll systems are in place to deal with this new responsibility.
National Work Health and Safety Laws
The federal government’s harmonisation of Australia’s work health and safety laws is progressing steadily, and the harmonised laws are planned to commence on 1 January 2012.
South Australian businesses should now be reviewing their health and safety processes and procedures, in order to ascertain whether any changes are required to ensure compliance with the harmonised Work Health and Safety laws from 1 January 2012.
