Prices are skyrocketing….
Since the fuel price surge not long ago, prices in Australia have continued to climb. An iceberg lettuce that used to cost less than $5 has shot up to $12 in some supermarkets. Even KFC can’t keep up — they’ve notified customers that, due to supply issues across the country, they are temporarily using a mix of lettuce and cabbage in their Victorian, NSW, Queensland, ACT and Tasmanian stores.
Energy is also in short supply, with major providers notifying customers of increases in electricity and gas prices.
The cost-of-living pressure on Australians is mounting by the day, so the government has to do something. On one hand, the RBA has raised interest rates twice in a row, by more than expected; on the other hand, the newly elected Labor government wrote to the Fair Work Commission last week asking them to make sure low-income workers’ real wages don’t go backwards, and to consider raising the minimum wage in line with inflation.
Australia raises its minimum wage at the start of every financial year, usually by around 2%. The current inflation rate in Australia is 5.1% (2.7% above wage growth) — the highest in twenty years — so the federal submission effectively means the minimum wage rise this year could be the largest in recent memory.
The government said: “Sustained high inflation and soft wage growth are currently dragging down real wages across the economy and putting increasing cost-of-living pressure on low-income employees.”
Of course, how much it will rise is not yet finalised, and employers will push back. The Fair Work Commission is expected to respond to the federal submission before the end of the financial year.
National minimum wage
The minimum wage mentioned above refers to the National minimum wage, which sets out the minimum pay an employee should receive where they are not covered by an employment agreement with their employer. The requirements set out include:
– the national minimum wage for adult employees
and
the national minimum wage for the following groups:
– trainees, apprentices and junior employees
– employees under training arrangements
– employees with disability
– casual loading for casual employees
It is currently $20.33 per hour, or $772.60 per week (based on a 38-hour week), referring to pre-tax wages, effective from 1 July 2021, and reviewed at the start of every financial year.
It also provides that all casual employees covered by the national minimum wage must receive a casual loading of at least 25%. In other words, for employees without paid sick leave or annual leave, the minimum wage should be $25.41 per hour.
Modern awards
The minimum wage standard that is more likely to apply to you — modern awards.
You can think of them simply as industry- and occupation-specific minimum wages and the terms and conditions that apply in the workplace for particular employees.
Employee entitlements covered include:
– wages
– hours of work
– rostering
– rest breaks
– allowances
– leave loading
– overtime pay
The employees covered include:
– adult employees’ wage levels, which in some cases vary with the employee’s experience and professional qualifications
– wage levels for junior employees, employees with disability, and trainees/apprentices
– casual loading
– piece rates
In summary, not all employees are covered by the same minimum wage — it varies by industry, and within the same industry the minimum wage that applies to an employee will depend on their qualifications, age and scope of work.
Australia currently has more than 120 industry awards, and in most industries the minimum wage is higher than the National minimum wage. For the most common retail industry (General Retail Industry Award 2020), the latest minimum wage levels from level 1 to level 8 are shown in the table below (level 1 generally refers to entry-level employees, rising from there).
Modern awards are also adjusted and updated over time. On the Fair Work website, searching for an industry + modern awards will bring up the latest version.
Leave that employees are generally entitled to
Leave for Australian employees generally falls into the following four categories:
– annual leave
– sick leave and carer’s leave (for your own illness or to care for a sick family member)
– public holidays
– parental leave (for a newborn or adopted child)
Apart from casual employees, all employees are entitled to paid annual leave, sick leave and carer’s leave. During such leave, the employer must pay at least the minimum wage (not including overtime, public holiday penalty rates, allowances or bonuses).
Annual leave
Full-time and part-time employees are entitled to four weeks of annual leave per year, and some are also entitled to annual leave loading. Note that, although casual employees do not get paid leave, they can still request unpaid annual leave from their employer.
In the normal course, employees accrue annual leave from their first day of work, and can choose to:
– take annual leave at any time within the first 12 months of employment
– take leave for any length (generally within the amount of annual leave they have accrued).
Employers cannot unreasonably refuse an employee’s request for annual leave, but in certain circumstances can also direct an employee to take annual leave.
When employment ends, any accrued but unused annual leave must be paid out, with the payment to include annual leave loading (if any).
Sick leave and carer’s leave
If an employee is sick or injured, they can choose to take sick leave. If it is a family member who is sick or injured, they can apply for carer’s leave. Together these are known as personal leave.
In general, carer’s leave is used to care for or support a member of the employee’s immediate family or household (for example: a spouse, de facto partner, parent, adoptive parent, child, sibling, grandparent), where the person being cared for is sick or injured, or in an emergency that requires assistance.
Sick leave and carer’s leave also accrue from the employee’s first day of work, and can be taken at any time, including within the first 12 months of employment. Full-time employees are generally entitled to 10 days of paid sick and carer’s leave per year. Part-time employees are entitled to paid sick and carer’s leave on a pro-rata basis. The exact amount of leave depends on their weekly hours of work.
Casual employees are entitled to unpaid sick and carer’s leave of up to two days each time it is needed. If full-time and part-time employees have used up their paid sick or carer’s leave, they may also apply for unpaid sick and carer’s leave if required.
Employers may ask employees to provide evidence that they were required to take sick leave or carer’s leave, typically a medical certificate or a statutory declaration. Sick and carer’s leave not used in a given year generally carries over to the next year. Unlike annual leave, however, when employment ends the employer is generally not required to pay out any unused sick or carer’s leave.
Public holidays
All employees have the right not to work on a public holiday. Employers can ask employees to work, and employees can refuse such a request on reasonable grounds.
Full-time and part-time employees who do not work on a public holiday are paid based on the hours they would normally work and their minimum wage rate. If they do work, they must be paid at penalty rates for overtime and public holidays. These rates are higher than their minimum wage.
If a public holiday falls while an employee is on annual leave or sick leave, they are still entitled to paid public holiday treatment. This is not deducted from the paid leave they are otherwise entitled to. However, the public holiday must fall on a day the employee would normally work for it to be treated as a paid public holiday.
Final word
The Fair Work calculator for annual leave, sick leave and carer’s leave wages is available at:
https://calculate.fairwork.gov.au/Leave
That covers the most basic but important rights you need to know when entering the Australian workplace.
If you encounter unreasonable treatment at work or need help, please contact us!
