What is happening in the world of HR for small business?
Minimum Wage Increase
On Wednesday 19th June 2021, the Fair Work Commission announced that the Minimum Wage would increase by 2.5%. The new minimum wage will be $20.33 per hour or $772.60 per week. This increase will be effective for the majority of awards from the first pay period after 1 July. As in 2020, the increase will be implemented in stages for a small number of awards as outlined below.
Group 1 – effective from 1st July 2021
The majority of awards will fall into Group 1 unless listed in Group 2 or 3 below.
Group 2 – effective from 1 September 2021
- Retail Award
Group 3 – effective 1 November 2021
- Pilots Award
- Cabin Crew Award
- Airline Ground Staff Award
- Airport Award
- Alpine Resorts Award
- Amusement Award
- Dry Cleaning and Laundry Award
- Fitness Award
- Hair and Beauty Award
- Hospitality Award
- Live Performance Award
- Models Award
- Marine Tourism and Charter Vessels Award
- Nursery Award
- Racing Clubs Events Award
- Racing Ground Maintenance Award
- Registered Clubs Award
- Restaurant Award
- Sporting Organisations Award
- Travelling Shows Award
- Wine Award
Since 1 July 2018, the minimum wage has increased by a total of 10%. So if you haven’t recently reviewed your employees’ salaries to ensure they are still meeting the minimum requirements, now is the time.
It is also a great time to check rates for employees that receive a flat hourly rate are still meeting the Better Off Overall Test (BOOT). Wage theft laws have been implemented in most states. A case in NSW saw a company Director incur a personal fine of $39,000 for underpayment of wages. One of our HR Team, Frances Orr, shared her thoughts on what small business owners can learn from this case in her article ‘Are you at risk when paying employees a ‘flat rate’?’.
If you would like one of the Strawberry Seed Team to assist you with an audit of your employee wages, please give us a call on (03) 4216 5200 or book a meeting online.
Casual Employees and Contractors
Now is the perfect time to review your Casual employees and Contractors to ensure they are still classified correctly and have not crept into a regular pattern of work that will put you at risk. If you would like assistance in reviewing your current employment classifications, book some time with one of our team.
2021 Superannuation Increase
This is our final reminder that effective 1 July 2021, employers will be required to increase the minimum superannuation contribution to employees from 9.5% of “Ordinary Time Earnings” (OTE) to 10%.
Depending on whether an employee’s salary is expressed as inclusive or exclusive of superannuation, it may decrease an employee’s take-home pay or increase costs for the employer. Now is an excellent time to carefully review how this increase will affect your employees.
Is your remuneration inclusive or exclusive of superannuation?
Superannuation is often framed as an add-on to wages. Therefore we say, “your salary is $60,000 plus 9.5 % super”. Every time we use the phrase “plus super”, we are saying that remuneration is exclusive of superannuation.
The benefit of structuring pay as exclusive of superannuation is that it makes it easy to compare the pay rates against Award rates as Modern Awards rates are exclusive of superannuation. It also makes it much easier to implement an increase in superannuation.
Executives and professionals may sometimes have their wages expressed inclusive of superannuation. For example, “The salary is $60,000 inclusive of super” or “$54,794 plus 9.5% superannuation”. For this group of employees, their take-home pay will reduce on 1 July 2021.
Now is a good time to consider how this impending increase will impact your business. For assistance with this process, speak to a member of the Strawberry Seed team.
Are you ready for the 2021/22 Financial year?
With so many competing challenges being thrown at small business right now, it is not surprising that we get to the end of the financial year and find that some HR issues have been sent to the bottom of the list. In our article, 5 EOFY HR Questions for Small Business, we provide some tips around crucial matters such as the Minimum Wage Increase, that are well worth focussing on to avoid problems down the track.
