Fair Work Commission Decision Annual Wage Review 2022

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15 June 2022, the Fair Work Commission (FWC) minimum wage panel announced the 2022 annual wage review decision (the Decision) under the Fair Work Act 2009. The FWC has decided to apply increases as follows: 

$40 per week (5.2%) to the national minimum wage;

$40 per week to award wage rates up to and including $869.60 per week;

Increases of 4.6% to award wage rates above $869.60 per week.

This year’s increase is the highest wage increase in more than a decade. In its Decision the FWC took into account the position of various parties, the ACTU’s claim of 5.5%, the ‘peak’ employer group positions, the AiG (2.5%) and ACCI (3.0%), and the submissions of the new Federal Government which argued for an increase of 5.1%. The FWC noted the ‘sharp increase’ in inflation, and the reductions in unemployment and underemployment. The FWC concluded that the changes in economic conditions justified the increase awarded, although noting the 0.5% increase in superannuation effective 1 July 2022.  

The decision increases the national minimum wage by $40.00 (or 5.2%) from $772.60 per week to $812.60 per week based on a 38 hour week, or $21.38 per hour.  

For award covered employees, the minimum wage rates in modern awards up to $869.60 per week are also increased by $40.00 per week, and minimum wage rates above $869.60 per week will increase by 4.6%. 

For most modern awards the wage increases are effective from the commencement of the first full pay period on or after 1 July 2022. 

Modern award minimum wages for juniors and training employees 

Under most modern awards junior employees receive a percentage of a relevant award rate of pay. As a consequence, these employees will also receive a proportion of the increase in minimum rates. 

Employees to whom a training arrangement applies and who are covered by the National Training Wage Schedule (NTWS) will have their rates adjusted by the FWC as set out in the national minimum wage order.  

Award/agreement free juniors and trainees 

Minimum wages for juniors who are award/agreement free are to be based on the junior wage percentages in the Miscellaneous Award 2020 applied to the national minimum wage.  

For trainees who are award/agreement free, the NTWS in the Miscellaneous Award 2020 as adjusted will apply for these employees. The apprentice provisions in that award and the provisions of the NTWS will be incorporated into the national minimum wage order. The order will also provide that adult apprentices should not receive less than the national minimum wage. 

Employees with a disability 

The national minimum wage order will contain two special national minimum wages for award/agreement free employees with a disability. For employees with a disability whose productivity is not affected, a minimum wage of $812.60 per week or $21.38 per hour based on a 38-hour week. 

Employees whose productivity is affected will be paid in accordance with an assessment under the supported wage system, subject to the minimum payment fixed under the Supported Wage System Schedule (SWSS). 

Transitional instruments 

The FWC has decided the rates in transitional instruments remaining in operation will be varied by the same percentage amount that shall apply to modern award minimum wages subject to a minimum increase of $40 per week on the basis of a 38-hour week. For more information on the increases that apply to transitional instruments members can contact the AFEI Hotline. 

Copied State Awards 

The FWC has decided the rates in all copied state awards other than a small number of transport industry related exceptions (noted by the FWC) will be varied by the same percentage amount that shall apply to modern award minimum wages subject to a minimum increase of $40 per week effective from the commencement of the first full pay period on or after 1 July 2022. 

Allowances 

In modern awards, work related allowances are linked to a percentage of the standard rate as defined in the modern award. Accordingly, the increase to wage rates (including the standard rate in the award) will flow on to work related allowances. 

Modern awards provide that an increase to expense related allowances must be considered at the time of an adjustment to the standard rate in the award. To determine the extent of any increase, the relevant adjustment factor is the percentage movement in the applicable index figure most recently published by the Australian Bureau of Statistics since the allowance was last adjusted. The FWC will publish draft determinations concerning increases to expense related allowances shortly.  

Casual loading for award/ agreement free employees 

The national minimum wage order will contain a casual loading of 25 per cent for award/ agreement free employees. 

Wage Rate Schedules 

Updated Wage Rate Schedules for 2022 will soon be available to members. 

In modern awards, work related allowances are linked to a percentage of the standard rate as defined in the modern award. Accordingly, the increase to wage rates (including the standard rate in the award) will flow on to work related allowances. 

Modern awards provide that an increase to expense related allowances must be considered at the time of an adjustment to the standard rate in the award. To determine the extent of any increase, the relevant adjustment factor is the percentage movement in the applicable index figure most recently published by the Australian Bureau of Statistics since the allowance was last adjusted. The FWC will publish draft determinations concerning increases to expense related allowances shortly.  

Casual loading for award/ agreement free employees 

The national minimum wage order will contain a casual loading of 25 per cent for award/ agreement free employees. 

Wage Rate Schedules 

Updated Wage Rate Schedules for 2022 will soon be available to members. 

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