Payroll Updates: Minimum Wage, Award Changes and Parental Leave
Minimum Wage Staggered Increases and Award Changes
The national minimum wage increased on 1 July by 1.75% to $19.84 per hour (or $753.80 per week).
The minimum wage increase applies to employees on JobKeeper if their pay rate is defined by an award rate or the national minimum wage. This means the amount of JobKeeper top-up payment may reduce in alignment with the wage increase.
This year, the Fair Work Ombudsman has implemented minimum wage increases to awards in a staggered approach by grouping awards into three categories:
Group one awards increase from 1 July 2020.
Group two awards increase from 1 November 2020.
Group three awards increase from 1 February 2021.
There have also been some changes made to allowances, penalty rates and loadings in several awards; visit the Fair Work Ombudsman webpage for details. Affected awards are Social and Community Services Award, Aged Care Award, Building and Construction Award, Joinery Award, Mobile Crane Award and the Miscellaneous Award.
Changes to Parental Leave Pay
From 1 July, eligible employees can now split their paid parental leave into two periods within two years of the birth of the child, rather than having to take it as one continuous period of 18 weeks.
The new plan allows more flexibility with how and when the leave can be taken:
One initial fixed period of 12 weeks to be taken within 12 months of the birth or adoption.
One flexible period of 6 weeks (or 30 working days) to be taken within 24 months of the birth or adoption. This period can be negotiated to suit both employer and employee. For example, the employee may return to work half-time and take the flexible leave period over 12 weeks.
The two periods can be taken together to provide 18 weeks of unbroken leave if desired.
Payment of parental leave remains the same, with the system administered by Services Australia. From 1 July, the amount of parental leave pay is $753.80 in line with the minimum wage increase.
Review Your Payroll Systems
The start of the financial year is a great time to review your payroll setup, policies and procedures. Talk to us if you need to implement practical parental leave policies that are beneficial for both employer and employees and allow for smooth transition between leaving and returning to work. We can also review your pay categories and adjust award rates where needed.