Fair Work Commission Wage Decision 2020

Tom Earls , 22 June 2020

The Fair Work Commission has increased the national minimum wage and base rates of pay in modern awards by 1.75%. There will be a staged rollout of increases, with those relevant to the Architects Award to come into effect on 1 November 2020. Fair Work Lawyers Tom Earls provides an explainer.  

Wage increase 

The minimum wage has been increased by 1.75% to $753.8 or $19.84 per hour (a 35c per hour increase on the minimum wage). 

In keeping with recent years’ decisions, modern award rates will also increase by 1.75%. 

Apprentice and trainee rates will increase by proportionate amounts. 

The decision does not expressly deal with how allowances will change. In previous years skill and disability allowances were increased by the same percentage and expense-related allowances by the applicable CPI measure. We anticipate this will be the same but are unable to confirm this. 

Operational date 

Unlike previous years, increases will commence at different times for different industry sectors. 

Tranche 1 will commence on 1 July 2020. This includes frontline health and social assistance workers, teachers, childcare and essential services. 

Tranche 2 will commence on 1 November 2020, and includes construction and manufacturing. [This includes the Architects Award and other awards relevant to architectural practice]

Tranche 3 will commence on 1 February 2021, and includes the sectors most heavily affected by the current Covid-19 crisis, including accommodation, food services, arts, aviation, retail trade and tourism. 

Who does this affect? 

This decision affects all employees who a modern award applies to. If you have award-based employees who are paid above award rates, the ‘absorption’ principle means that you do not have to increase above-award payments unless the new award minimum is higher than the employee’s current rate, in which case you must pay at least the new minimum. 

Employers who have enterprise agreements in place (including pre-Fair Work Act 2009 documents) will need to ensure that the base rate of pay is at least equal to the new minimum. This requirement only applies to the base rate of pay and does not extend to allowances, penalty rates or loadings. 

NB: even if an agreement has expired, it remains in force until it is replaced by a new one or the Commission terminates the agreement. This applies to most pre-Fair Work Act 2009 agreements. 

Tom Earls is a Founding Partner of Adelaide-based Fair Work Lawyers. This information has been republished with permission. The information contained here is general in nature and does not constitute legal advice. The reader should seek legal advice in relation to their own specific circumstances.