HR Tip - Annual Wage Review 2023-24 (What you need to know!)
Hey everyone! 👋 As many of you know, the Fair Work Commission recently completed its annual wage review for 2023-24. This review will affect all employees covered by Modern Award Minimum Wages (this includes the Social Community Home Care and Disability Services Industry Award) and the National Minimum Wage (generally for Award-Free employees). To help our HR Help Hub community navigate these changes smoothly, I’ve put together a quick guide with key points and actions for business owners and managers. By way of introduction my name is Phil. I am a Senior HR Professional and the Founder of Human Power (HR & Talent Consultancy). So, What Do You Need to Know? Effective Date and Details: • Effective Date: The new wage rates will kick in from 1st July 2024. • Increase Details: The updated minimum wage rates have been outlined in the Fair Work Commission’s decision. You can check out the details here. (To save you some time, it’s a 3.75% increase on the current minimum rates.) Actions Required Let’s dive into what you need to do to ensure your business complies with these new changes. 1. Review Salaries (Annualised Wages) & Employees Paid Above Award Rates If you have employees on annualised salaries with off-set arrangements or who are paid above award rates, it’s recommended to conduct a Better Off Overall Test (BOOT). This ensures that their total remuneration is higher than the minimum entitlements under the relevant modern award. Should the BOOT determine that wages/salaries are below the required minimum, you will need to complete a Pay Increase Letter informing the employee of the change to their remuneration effective from 1st July 2024. For wages/salaries that are above the new award rate, you may be able to absorb the increase. 2. Communicate with Your Employees Prepare Personalised Pay Increase Letters: You are required to notify your employees of changes to their employment, including changes to their remuneration (wages/salary). Sending a personalised letter to each affected employee about their new pay rate and the effective date is best practice and recommended. To save you some time, I’ve attached a general example of a pay increase letter template.