On the 3 June 2011 Fair Work Australia handed down its second wage decision which will take effect on the first full pay period on or after 1 July 2011.

Whilst some media have reported the new wage increase as being $19.40, Members are advised that the increase is, in fact, 3.4% of the modern award rate.

The reported increase of $19.40 is for the national minimum wage mainly used for those workers who are not covered by an award or agreement.

The following is an extract from the actual decision:

“[334] The economy is performing reasonably well, labour productivity is growing, the profit share remains at historically high levels and underlying inflation is well within the RBA’s medium-term target band. Employment is growing, unemployment is reducing and labour force participation remains high. In the circumstances a significant increase is appropriate which will improve the real value of award wages and assist the living standards of the low paid. For the reasons discussed in Chapter 8 we have adopted a uniform percentage increase. The increase in modern award minimum wages we have decided on is 3.4 per cent. Weekly wages will be rounded to the nearest 10 cents.

[335] The national minimum wage for award/agreement free employees is currently set at the minimum wage for the C14 classification, the lowest wage level in the Manufacturing Award. No cogent basis was advanced for disturbing that relationship. The national minimum wage will be $589.30 per week or $15.51 per hour. The hourly rate has been calculated on the basis of a 38 hour week for a full-time employee, as required by s.62 of the Fair Work Act. This constitutes an increase of $19.40 per week or 51 cents per hour.”

TTIA Members will be sent new wage summary sheets in due course.

Please remember the increase is fully absorbable into over award payments and is effective from the first pay period on or after 1 July 2011.

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