Edge Legal
FWC approved a 3.50% increase in all Award rates and the National Minimum Wage (NMW) which takes effect from the first full pay period after 1 July 2025.
The decision will lift the NMW from $24.10 to $24.95 an hour or $915.90 to $948.00 a week based on a 38 hour week.
Our Take
This amount was in the range expected by most independent commentators. With inflation tracking at around 2.4% annually and ongoing concerns regarding the cost of living crisis, anything from 3-4% was more realistic than the employer groups seeking around 2.5% and Unions seeking 4.5%.
FWC was clearly worried by the fact that, since July 2021, the real value of modern award wages had declined by 4.5 % relative to inflation.
There is no productivity requirement or trade-off. Worryingly, productivity has been trending down 1.2% in 2024 and averaging near zero over the past five years. Employers will need to budget for the increases and then implement their own productivity and efficiency offsets.
Action Items
Update applicable Award rates and NMW
Check your EAs for clauses that use this decision to provide for EA increases and apply
Focus on genuine productivity and efficiency strategies before taking knee-jerk reactions to restructure
