When the AFPC hands down a pay increase

Tuesday 26 August 2008

Under the current system the Australian Fair Pay Commission (AFPC) hands down annual decisions adjusting minimum pay rates; however, this can sometimes cause confusion for employers and employees alike.

For example, as an employer you may have different employees on different arrangements, such as, existing AWAs, a pre-reform federal award and a State NAPSA.

What happens is that the decision by the AFPC increases the relevant minimum wage (sometimes referred to as a pay scale) for those employees covered under the pre-reform federal award and also those covered under a NAPSA.

Importantly, however, that decision would not apply to an employee covered under pre-WorkChoices federal agreements (certified or AWAs) or indeed pre-WorkChoices State agreements – even if the rates in these agreements fell below the federal Minimum Wage.   Pre-WorkChoices means prior to 27 March 2006.

Also, the increase only applies to the minimum wage rates for each classification under the Australian Pay and Classification Scale (and the Federal Minimum Wage) and can be absorbed into any amounts currently being paid in excess of those minimum amounts, e.g. over-award payments.