Changes In The Workplace Environment from 1 July 2023

From 1 July 2023, a range of changes will be made to key operational areas of employment law. Employers should ensure they are aware of the changes to remain compliant and seek further guidance from an employment lawyer if they need advice on any of the updates. Here’s what employers need to know about changes in the workplace environment from 1 July.

Increase in superannuation guarantee rate

This financial year the superannuation guarantee rate increased again from 10.5% to 11%. The rate will continue to increase by 0.5% each year until 2025 when it reaches 12%.

How the increase is applied will depend on the employee’s contract. If an employee receives a salary package inclusive of superannuation, their overall take-home pay is likely to decrease as the further .5% will be wrapped up in their total remuneration package. For employees who receive a base salary plus superannuation, their base pay will not be affected by the additional 0.5% superannuation contribution payment as the extra superannuation payment will be paid separately.

Increased national minimum wage and modern award wages

From the first full pay period on or after 1 July 2023, the national minimum wage will see an 8.6% increase to $882.80 per week or $23.23 per hour. The minimum modern award rate will also be increased by 5.75%.

Changes to paid parental leave

A change has been made to the paid parental leave scheme which will provide more flexibility to expectant parents. From 1 July 2023, rather than there being 18 weeks of parental leave pay and two weeks of dad and partner pay available, these periods will be combined for a total of 20 weeks of paid leave which can be shared between the parents in equal or unequal amounts.

There have also been some changes made to the eligibility income test for paid parental leave. A family income limit has been introduced and if an individual does not meet the individual eligibility income test of $156,647, then eligibility will be assessed against a family income limit of $350,000.

Increase in the high-income threshold

There has been a slight bump in the high-income threshold for unfair dismissal applications, increasing from $162,000 to $167,500. The new cap for compensation that can be awarded by the Fair Work Commission has been increased to a maximum of $83,750 up from $81,000 which will apply to unfair dismissal claims that are made after 1 July 2023.

Unless a modern award covers them, employees who earn more than the high-income threshold will not be eligible to make a claim for unfair dismissal.

Changes to Fair Work’s small claims process

The Fair Work Commission’s small claims process has undergone a change and there is an increased cap on the amount that can be awarded. The increase is significant and has jumped from $20,000 up to $100,000. It is hoped that due to the increased and more attractive cap, the process will now be accessed by a larger number of workers who are seeking compensation.

Increase in unfair dismissal fees

Finally, a small increase has been made to the filing fee for unfair dismissal, general protections and anti-bullying/sexual harassment applications made under the Fair Work Act 2009. This fee has increased from $77.80 to $83.30.