Fair Work Commission Wage Decision 2021

Tom Earls , 17 June 2021

The Fair Work Commission handed down the 2021 wage decision on 16 June, with a 2.5% increase to the national minimum wage and base rates of pay in modern awards. Tom Earls from Fair Work Lawyers provides an update.

Wage increase

The minimum wage has been increased by 2.5% to $772.60 or $20.33 per hour (a 49c per hour increase on the minimum wage).

In keeping with recent years’ decisions, modern award rates will also increase by 2.5%.

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

Last year the increases were applied progressively. The Commission has largely decided that this year’s increase will apply from the first full pay period on or after 1 July 2021 for most awards (including the Architects Award) with some exceptions for industries more heavily affected by COVID.

The Commission has delayed the increase for some ‘at risk’ industries (largely the ‘tranche 3’ industries). These award rates will increase on 1 November 2021.

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.

More information to come

The ACA will update relevant Award pay rates as soon as possible.