Employment Law Changes from 1 July 2021

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Home > Blog > Employment Law Changes from 1 July 2021

Employment law has seen some big changes in 2021, with some of the most significant increases to various aspects of the sector taking effect on 1 July. With changes being made to minimum wage, superannuation and applications lodged with the Fair Work Commission, there is a lot to look out for in the employment law space. Here is where to stay up-to-date with the changes.

Superannuation guarantee contribution increase

One of the most important employment law updates is superannuation contributions. Prior to 1 July 2021, the minimum superannuation contribution from an employer was 9.5% of a worker’s wage. From 1 July 2021, this increased by .5% each year. This will continue for the next four years until 2025, when the minimum contribution will be 12% of the employee’s ordinary wages.

Employers that are already contributing more than the standard 9.5% are not legally required to increase their contributions. For example, if an employer has been making contributions of 14.5% they will not be required to increase these payments in line with the .5% increases each year.

Minimum wage increase

After its Annual Wage Review, the Fair Work Commission has increased the national minimum wage by 2.5%. This means that the new national minimum wage will be $772.60 per week, which equates to $20.33 per hour.

A decision by the Fair Work Commission to increase wages under the Modern Awards will also take effect after 1 July 2021, increasing by 2.5%. However, the increases will not be available under all Modern Awards at once. While wage increases for most Modern Awards will take effect on 1 July 2021, those under the General Retail Industry Award will only see an increase on 1 September 2021. In the last quarter of the year, wages under a further 22 Modern Awards, including those in the hospitality, tourism, aviation and some retail industries will increase, coming into effect on 1 November 2021.

High-income threshold increase and maximum compensation available for unfair dismissal claims

Unfair dismissal applications made to the Fair Work Commission prior to 1 July 2021 were previously capped by the statutory high-income threshold of $153,600, meaning employees earning more than this amount were unable to bring unfair dismissal claims.

As of 1 July 2021, the high-income threshold has risen to $158,500. Each year the cap is subject to an adjustment formula, which has seen it increase by almost $100,000 since the introduction of the unfair dismissal system in March 1994, when the high-income threshold for non-award employees was set at $60,000 per year.

The maximum amount of compensation that can be awarded in an unfair dismissal claim lodged after 1 July 2021 has also increased to $79,250 from $76,800.

Tax-free component of redundancy payments

Any genuine redundancy payments made in the 2021/22 financial year will see the tax-free component increase to $11,341 plus $5,672 for each completed year of service.

If you need assistance ensuring your business is complying with the latest employment law changes our experienced employment lawyers in Cairns can help. Contact us today.

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