Fair Work Commission Wage Decision 2022

15 June 2022

The Fair Work Commission has just handed down the 2022 wage decision, increasing the national minimum wage and base rates of pay in modern awards. Tom Earls from Fair Work Lawyers provides a summary of the decision.

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

Wage increase

The minimum wage has been increased by 5.2% to $812.60 or $21.38 per hour (a $1.05 per hour increase on the minimum wage).

However, unlike recent years, there will be a proportionately higher increase to lower paid employees. This means that although the minimum wage will increase by that amount, modern award rates will increase by a lower amount, being 4.6%, subject to a minimum increase of $40 per week (based on a 38 hour week). The effect of this is that award wage rates below $869.60 will increase by $40, and award rates above this amount will increase by 4.6%.

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

The Commission has decided that this year’s increase will apply first full pay period on or after 1 July 2022.

The Commission has delayed the increase for some ‘at risk’ industries, which will increase on 1 October 2022:

  • Air Pilots Award 2020
  • Aircraft Cabin Crew Award 2020
  • Airline Operations – Ground Staff Award 2020
  • Airport Employees Award 2020
  • Airservices Australia Enterprise Award 2016
  • Alpine Resorts Award 2020
  • Hospitality Industry (General) Award 2020
  • Marine Tourism and Charter Vessels Award 2020
  • Registered and Licensed Clubs Award 2020
  • Restaurant Industry Award 2020

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.