Be prepared: changes apply from July 1, 2014

Analysis

Be prepared: changes apply from July 1, 2014

Many workplace-related amounts change (or are indexed) from 1 July each year. This year is no exception. This article summarises the changes that will apply from 1 July 2014.

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Many workplace-related amounts change (or are indexed) from 1 July each year. This year is no exception. This article summarises the changes that will apply from 1 July 2014.

Annual wage review
 
On 4 June 2014, the Fair Work Commission (FWC) handed down its annual wage review decision. The decision varied the following:
    • Minimum wage rates in modern awards  increase by 3% from first full pay period commencing on or after 1 July 2014 (rounded to the nearest 10 cents);
    • National minimum wage – increased by 3% to $640.90 per week, or $16.87 per hour;
    • Default casual loading – increased to 25% (from 24%);
    • National minimum wage for juniors, apprentices, trainees and piece workers – most rates are expressed as a percentage of a nominated adult rate so they receive a proportionate increase to the adult rate; and
    • Supported Wage System – employees with a disability – these employees are paid a percentage of the relevant adult wage, based on their assessed capacity. The 3% increase will also flow through to these employees. The minimum weekly payment (currently $78).
High income threshold
 
The high income threshold (for unfair dismissal eligibility and application of award coverage) will increase to $133,000 per annum, effective 1 July 2014. The threshold is $129,300 per annum until 30 June 2014.

The high income threshold is the amount by which a category of employee is excluded from certain provisions of the Fair Work Act, or the application of a modern award. The increase in the threshold affects a number of different provisions under the Fair Work Act, including:
    • An award/agreement-free employee’s eligibility to claim unfair dismissal;
    • The maximum amount of compensation (in lieu of reinstatement) that the Fair Work Commission (FWC) can order an employer to pay to an employee deemed to have been unfairly dismissed; and
    • The level an employer can guarantee an employee’s earnings which renders the provisions of the applicable modern award no longer applicable to the employee.
Superannuation guarantee
 
For the year 2014/15, employers are required to pay 9.5% of the ordinary time earnings of their employees (including part-time and casual employees) who are aged over 18, and who are paid $450 (before tax) a month, into a complying superannuation fund or retirement savings account. The increased percentage amount applies to any ordinary time earnings paid to an employee from 1 July 2014.
 
Employers who do not pay the correct superannuation contributions by the due date must pay this superannuation guarantee (SG) charge.
 
In the federal budget on 13 May 2014, it was announced that the minimum SG contribution will remain at 9.5% until 30 June 2018. The charge percentage will then increase by 0.5% each year until it reaches 12% from 1 July 2022.

Transitional provisions in modern awards
 
From 1 July 2010, various monetary entitlements under modern awards were adjusted (up or down) by a percentage if there was a difference in the current rate and the rate prescribed by an applicable modern award. The phasing in process occurred over a four-year period (with an annual adjustment), which will be complete as of 1 July 2014. The transitional provisions of a modern award cover the following employee entitlements:
    • Minimum wage rates (including piecework rates and industry allowance);
    • Casual or part-time loadings;
    • Saturday, Sunday, public holiday, evening or other penalties, and
    • Shift allowance/penalties.
As a result, minimum wages, loadings and penalties, are to be taken, in whole, from the relevant modern award.

Overtime penalty rates were not included in the transitional provisions under modern awards.

Modern award changes from 31 December 2014

 
Subscribers should be aware that some non-wage related transitional provisions in modern awards continue to apply until 31 December 2014. These include:
    • Redundancy provisions – awards which contain transitional redundancy provisions include: Clerks – Private Sector Award 2010; General Retail Industry Award 2010 and Commercial Sales Award 2010;
    • Accident make up pay – awards that contain transitional accident make-up pay provisions include: Clerks – Private Sector Award; Commercial Sales Award; Meat Industry Award; Road Transport & Distribution Award; Vehicle Manufacturing, Repair, Services and Retail Award; and Building & Construction General On-Site Award; and
    • Location allowances.
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