Minimum Wage Increase and Superannuation Changes from 1 July 2022

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Home > Blog > Minimum Wage Increase and Superannuation Changes from 1 July 2022

A number of changes have been made to workplace relations and came into effect from 1 July 2022. Employers and employees alike must be aware of the changes and employers, in particular, must pay careful attention to ensure they are compliant with the changes and avoid penalties.

Minimum wage increase

One of the most topical changes this financial year is the increased minimum wage. The Fair Work Commission approved an increase of the National Minimum Wage by 5.2%, which means the new National Minimum Wage will equate to $812.60 per week ($21.38 per hour based on a 38-hour week).

The modern award minimum wages have also increased. Modern award rates previously below $869.60 per week will be increased by $40 per week (based on a 38-hour week for a full-time employee) and modern award rates above $869.60 will be increased by 4.6%, except for those in aviation, hospitality and tourism industries.

Changes to employer superannuation contributions

Once again the minimum superannuation guarantee has increased by half a per cent, to 10.5% per annum.

The superannuation contribution rate will continue to increase half a per cent each year until July 2025, by which point employer superannuation contributions will reach 12%. Eligible employees should check their pay slips to ensure 10.5% of their salary is being contributed to their superannuation.

For employees whose superannuation forms part of their salary package, the extra half a per cent will cause a decrease in their take-home pay, whereas employees who earn a base salary plus super will not have their take-home pay affected by the increase.

The $450 monthly eligibility threshold has also been removed so employees are eligible for superannuation payments on anything they earn. The exception to this rule is if the employee is under 18 years of age, in which case they will be required to have worked for at least 30 hours in a week to have superannuation paid in addition to their earnings.

Changes to the high-income threshold for unfair dismissal claims

Prior to 1 July 2022, the high-income threshold for employees bringing an unfair dismissal claim to the Fair Work Commission was $158,500 per annum. This cap has now increased to $162,000 per annum unless the employee is covered by an enterprise agreement or award. This means that any employee earning more than $162,000 per year will not be able to bring an unfair dismissal claim to the Fair Work Commission if they are not covered by a modern award.

A change has also been made to the compensation limit for unfair dismissal cases. The maximum amount of compensation that can be awarded by the Fair Work Commission for an unfair dismissal claim is now $81,000.

Updated Fair Work Information Statement

Finally, the Fair Work Ombudsman has updated its Fair Work Information Statement. The Statement contains important information about the National Employment Standards and conditions of employment. This document must be provided to all employees upon commencement of their employment.

How can employers ensure they are compliant with the changes?

To meet compliance, employers should conduct a salary or pay review to bring all employees in line with the national minimum wage or modern award rates to ensure none of them are being underpaid. Employers should also increase their superannuation contributions to 10.5% for all eligible employees.

If you require clarity on any of the changes to workplace relations or need assistance implementing the changes, our employment lawyers can help ensure you are compliant.

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