2022-23 Annual Wage Review – Decision Issued

On 2 June 2023, the Minimum Wage Panel of the Fair Work Commission (FWC) handed down its Minimum Wage Ruling for the 2022-23 Annual Wage Review.

The FWC has awarded an unexpectedly high increase of 5.75% for Modern Award base rates of pay which will take effect in ALL Modern Awards from the first full pay period commencing (ppc) on or after 1 July 2023. The increase will flow on proportionately to junior and training rates of pay.

The Minimum Wage Panel has also determined to align the National Minimum Wage (NMW) to the equivalent ‘C13’ classification level of Modern Awards. Historically, the NMW has aligned directly with the ‘C14’ classification, otherwise known as a transitional ‘Introductory’ level in a select number of awards. This move effectively flows a double increase on to the NMW, which will increase by a whopping $70.20 per week (or, more than 8.5%) to $882.80 per week ($23.23 per hour) from ppc 1 July 2023.

Allowances contained in each Modern Award, which are calculated as a percentage of the ‘standard rate’, will of course increase following the 5.75% per week increase to the ‘standard rate’ they are calculated from. Furthermore, expense-related allowances, specific to each Modern Award, will increase as necessary subject to the formal determinations issued by the FWC.

In settling on this year’s sizeable increase – which considerably eclipses last year’s increase of 4.6% (5.2% in the NMW) – the Panel commented:

The level of wage increase we have determined is, we consider, the most that can reasonably be justified in the current economic circumstances. We acknowledge that this increase will not maintain the real value of modern award minimum wages nor reverse the reduction in real value which has occurred over the last two years. In the medium to long term, it is desirable that modern award minimum wages maintain their real value and increase in line with the trend rate of national productivity growth. A return to that path is likely to be possible in future Reviews when there is a reversion to a lower inflationary environment and trend productivity growth.

Both the Summary and the Full Decision can be viewed on the FWC’s website here.