Delay to Minimum Wage Increase

The Fair Work Commission has indicated that it will likely delay the minimum wage increase this year due to exceptional circumstances.  Recently the Fair Work Commission has reviewed its “Statutory parameters” around handing down a wage increase decision.  Section 285 of the Fair Work Act requires the Commission to make a determination on 30 June each year.  However, Section 287 of the Act allows for the Commission, in exceptional circumstances, to allow for the adjustment to take effect on a later date.  This review has opened the door to a potential delay to the increase, which usually takes effect on 1 July each year. 

The Australian Chamber of Commerce and Industry has already come out stating that wages should be frozen until 1 July 2021.  This comment was made in light of the unprecedented economic and job crisis that Australia is currently experiencing. 

Despite the economic crisis faced by many businesses, the ACTU has not backed down on its push for further increases on 1 July 2020.  The ACTU is seeking a 4% increase to the current minimum wage.

Whilst a decision has not yet been reached by the Commission as to what a wage increase will look like, there are several options open to the Commission.  The review conducted by the Commission has raised that it may implement staged increases whereby one increase commences on 1 July and a second on 1 December 2020.  Such a strategy would be aimed at limiting the immediate impacts of the first increase.