Following its Annual Wage Review 2021-22, the Australian Fair Work Commission (FWC) made two important announcements regarding the National Minimum Wage and the award minimum wage in Australia. In this article we will take a look at what was defined about the two topics, and how this will affect work visa holders and, more in general, the obtainment of an Australian work visa.
1. Announcements from the Australian Fair Work Commission
Following the announcement of June 15, 2022, the Fair Work Commission (FWC), Australia’s workplace tribunal, will now issue draft determinations and orders about how their decision affects awards (legal documents that outline the minimum pay rates and conditions of employment for category of workers). The FWC will then update the pay rates for each award.
The commission is currently working to update to its pay tools, information and resources with the new rates. They expect to have these updated on 1 July 2022 for the first set of awards affected.
2. National Minimum Wage increase in Australia
The National Minimum Wage applies to employees not covered by an award or registered agreement. From 1 July 2022, the National Minimum Wage will increase by $40 per week, which corresponds to an increase of 5.2%. The new National Minimum Wage will be $812.60 per week or $21.38 per hour.
3. Award Minimum Wage increase
In Australia, most workers are covered by an award. Awards are legal documents that outline the minimum pay rates and conditions of employment and are fixed by an industrial tribunal or other body, payable to workers in a particular occupation, enterprise or industry.
The FWC has announced that minimum award wages will increase by 4.6%, which is subject to a minimum increase for award classifications of $40 per week and based on a 38-hour week for a full-time employee.
This means minimum award wages:
- above $869.60 per week, will get a 4.6% increase
- below $869.60 per week, will get a $40 increase.
Below, some examples to understand how this wage increase will actually work.
3.1 Example: Employee earning less than $869.60
X is a full-time employee working under the Manufacturing Award. X is a general factory hand and the weekly minimum wage before 1 July 2022 is $772.60. As this weekly wage is below $869.60, X will receive a $40 increase in the weekly wage from 1 July 2022.
3.2 Example: Employee earning above $869.60
Y is a trade qualified employee working under the Manufacturing Award. Y’s weekly minimum wage before 1 July 2022 is $899.50. As this weekly wage is above $869.60, Y weekly wage will increase by 4.6% from 1 July 2022.
4. When will the minimum wage in australia increase?
4.1 National Minimum Wage
The new National Minimum Wage will apply from the first full pay period on or after 1 July 2022. This means if you have a weekly pay period that starts on Mondays, the new rates will apply from Monday 4 July 2022.
If you are covered by an award, award increases happen in 2 stages. Most awards will increase from the first full pay period on or after 1 July 2022. For some awards in the aviation, hospitality and tourism industries, the increase will happen from 1 October 2022.
5. What does this mean for visa holders and their employers?
The minimum wage increase will have consequences from an immigration point of view: in fact, new sponsored visas applications will have to meet the new salary.
Furthermore, all salaries and awards for visa holders in Australia should be reviewed according to the new provisions. In fact, although a sponsored visa holder may have been approved with a certain salary, the visa holder must continue to be paid the relevant award wage where applicable.
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