From 1 July 2024, several significant changes impacting employers in Australia will come into effect. These changes, stemming from the Fair Work Commission’s annual wage review and various legislative updates, will influence wages, superannuation, independent contractor rights, unfair dismissal compensation, delegates’ rights, and the handling of casual employment. Understanding and preparing for these changes is crucial for compliance and maintaining smooth operations.
National Minimum Wage Increase and Modern Award Minimum Wage Increase
The Fair Work Commission conducts an annual wage review, typically in the lead-up to 1 July. This review assesses and adjusts the national minimum wage and modern award minimum wages. For the financial year starting 1 July 2024, both the national minimum wage and modern award minimum wages increased by 3.75%. These adjustments are to be implemented from the first full pay period on or after 1 July 2024.
Practical Tips for Employers:
- Review and Update Payroll Systems: Ensure your payroll systems are updated to reflect the new wage rates.
- Communicate Changes to Employees: Inform your employees about the upcoming wage increases to manage expectations and maintain transparency.
- Budget for Increased Labor Costs: Adjust your financial planning to accommodate the higher wage expenses.
- Annualised Salaries: Ensure any individual/award flexibility agreements and annualised salary arrangements continue to meet the BOOT (Better Off Overall Test).
Superannuation Guarantee Increase
From 1 July 2024, the superannuation guarantee rate will increase from 11% to 11.5%. This rate applies to all salary and wage payments made on or after this date. The superannuation guarantee rate is set to continue rising, reaching 12% on 1 July 2025.
Practical Tips for Employers:
- Update Superannuation Contributions: Adjust your superannuation contributions to comply with the new rate.
- Inform Employees: Communicate the increase in superannuation contributions to your employees.
- Financial Planning: Factor in the increased superannuation contributions into your budget.
Independent Contractor Unfair Contract Terms Disputes
Independent contractors earning below a specified high income threshold will now be able to raise disputes over unfair contract terms related to workplace relations matters in the Fair Work Commission. This change aims to provide greater protection and fairness for independent contractors.
Practical Tips for Employers:
- Review Contractor Agreements: Ensure that your contracts with independent contractors are fair and compliant with the new regulations.
- Consult Experts: Seek advice to review and possibly amend existing contracts to avoid disputes.
- Stay Informed: Keep updated on the high income threshold and related regulations.
- Sham Contracting: Ensure your contractors are actually contractors and not employees.
Unfair Dismissal Compensation Limit
The maximum compensation that can be awarded for unfair dismissal claims will increase to $87,500. This adjustment reflects changes in the economic landscape and aims to provide fairer compensation for those affected by unfair dismissal.
Practical Tips for Employers:
- Revise Dismissal Policies: Ensure your dismissal policies and procedures are fair and comply with legal standards to avoid disputes.
- Train Managers: Provide training for managers on fair dismissal processes to minimize the risk of unfair dismissal claims.
- Seek Guidance: Consult with professionals to ensure compliance and handle disputes effectively.
Delegates’ Rights Term for Modern Awards
All modern awards in operation on or after 1 July 2024 must include a delegates’ rights term. This term applies to workplace delegates covered by the award and includes an obligation to have a delegates’ rights term in all enterprise agreements, even if no union is involved.
Practical Tips for Employers:
- Review Modern Awards and Enterprise Agreements: Ensure that all agreements include the required delegates’ rights terms.
- Educate Employees and Delegates: Inform your employees and workplace delegates about their rights and obligations under the new terms.
- Compliance Checks: Conduct regular compliance checks to ensure adherence to the new requirements.
Right of Entry for Suspected Underpayments
Unions will be able to obtain exemption certificates allowing them to enter an employer’s premises without notice to investigate underpayments of wages or other monetary entitlements of union members. This measure aims to protect workers’ rights and ensure fair pay practices.
Practical Tips for Employers:
- Maintain Accurate Records: Keep detailed and accurate records of employee wages and entitlements to demonstrate compliance.
- Cooperate with Unions: Be prepared to cooperate with union investigations and address any issues promptly.
- Regular Audits: Conduct regular internal audits to identify and rectify any underpayment issues before they escalate.
Casual Employment Changes Effective 26 August 2024
Significant changes to casual employment will take effect from 26 August 2024, including a new definition of casual employment, a new casual conversion process, and additional obligations on employers.
Practical Tips for Employers:
- Understand the New Casual Definition: Familiarise yourself with the new definition, which focuses on the absence of a firm advance commitment to continuing work and the entitlement to casual loading or pay rates.
- Update Employment Contracts: Review and update your casual employment contracts to reflect the new definition and requirements.
- Implement Casual Conversion Processes: Establish procedures to handle requests from casual employees wishing to convert to permanent employment, including timely and compliant responses.
- Provide the Casual Employment Information Statement: Ensure the Casual Employment Information Statement is provided to all new casual employees upon commencement and at other specified times.
Conclusion
The changes effective from 1 July 2024, and the upcoming changes on 26 August 2024, present significant shifts in the employment landscape in Australia. Employers must take proactive steps to understand, implement, and comply with these changes to avoid legal complications and ensure fair treatment of their employees. By staying informed and prepared, employers can navigate these changes smoothly and maintain a compliant and harmonious workplace.
Please call Harrisons for further information or advice on these changes.
Claire Harrison is the Founder and Managing Director of Harrisons, a flourishing HR consulting business that sprouted in 2009 from Claire’s passionate belief that inspiring leaders and superstar employees are the key success factor to any business. With over 20 years’ experience, Claire has worked as a HR Director of multi-national organisations, as a Non-Executive Board Director, and a small business owner. Claire’s corporate career includes working with companies such as BHP, Westpac, Fonterra and Mayne Nickless.
