HR Update - June 2022
As of tomorrow (July 1) there are some changes you need to be aware of if you are employing people on-farm.
Coming up is:
An increase in superannuation to 10%
Removal of the $450/month threshold for super guarantee
A 5.2% increase to the minimum wage
The removal of the $450 per month threshold for super guarantee from 1 July, 2022 (exception for under 18s working less than 30 hours per week). Currently, you only pay the super guarantee for eligible employees who earn at least $450 in pre-tax income for one month. Plus the Super Guarantee will increase from 10% to 10.5% on 1 July 2022 for the 2022–23 financial year. The SG percentage rate will continue increasing by 0.5% every year until it reaches 12% from 1 July 2025. Your one-touch payroll system should automatically update this; but it is worth checking.
Minimum wage changes
Our friends at EMA Legal have issues the following information regarding the increase in wages. The Decision: The Commission announced a 5.2% increase to the national minimum wage, bringing it to $812.60 per week ($21.38 per hour). Workers covered by modern awards and who are reliant on modern award rates will see a 4.6% increase to those rates. The changes for most but not all modern awards, will come in from 1 July 2022. The Commission delayed the introduction of the increases for some modern awards due to exceptional circumstances caused by the impact of the pandemic in the aviation, hospitality and tourism sectors. As a result, employers covered by the following modern awards will not have to implement the wage increase until 1 October 2022:
Aircraft Cabin Crew Award 2020
Airline Operations – Ground Staff Award 2020
Air Pilots Award 2020
Airport Employees Award 2020
Airservices Australia Enterprise Agreement 2016
Alpine Resorts Award 2020
Hospitality Industry (General) Award 2020
Marine Tourism and Charter Vessels Award 2020
Registered and Licensed Clubs Award 2020
Restaurant Industry Award 2020
1. Is this in addition to the increase in superannuation that employers are required to pay? Yes. Minimum wage increases are in addition to the increase in compulsory employer superannuation guarantee contribution payments, which will be 10.5% of ordinary time earnings from the first payroll processed in July 2022. Additionally, from 1 July 2022 the minimum $450 per month threshold for superannuation guarantee eligibility contributions will be removed, expanding coverage of super guarantee payments to eligible employees regardless of monthly pay. 2. Does this affect my staff who are covered by enterprise agreements? Only to the extent you must ensure that the base rates in your enterprise agreement are at least those prescribed in the relevant modern award for the classification of work, unless the enterprise agreement requires you to pass on modern award adjustments – this must be carefully checked. 3. When will the new award rates be published? The new rates have not yet been published by the Fair Work Commission. Draft determinations will be released on the Fair Work Commission website for submissions in the coming week, with the final determinations (which contain the rates) to be published thereafter. As an indication, the final determinations for last year’s wage review were published on 25 June 2021. 4. Are employee allowances impacted? Yes, if paid in accordance with the modern award. Any changes to allowances as provided by the modern awards will be published as a separate determination, which is released concurrently with the wage determination. EMA Legal recommend that once all determinations are published, employers conduct a complete review of their payroll systems so that they are ready to implement both the superannuation increase, and if applicable, the award pay rate increase. EMA Legal can assist employers with all queries related to modern award terms and coverage.