News

Yesterday, the Fair Work Commission decided to increase the National Minimum Wage by 3.5 per cent. 

Background  

• The Minimum Wage Panel (the Panel) established under the Fair Work Act 2009 (the Act) is required to conduct and complete an annual wage review in each financial year.
• The Panel determines variation to the minimum wages in modern awards and the national minimum wage order.
• The minimum wages determination, that will become effective from 1 July 2025, was handed down by the Panel on Tuesday 3 June 2025. Click here to access the Panel's full decision.  

Summary of the decision  

• The Panel awarded an increase of 3.5 per cent per week to the National Minimum Wage (NMW). The NMW will be $948 per week or $24.95 per hour.
• Minimum wages for each classification set out in all Modern Awards will receive an increase of 3.5 per cent. 
• Wage increases will be effective from the first full pay period on or after 1 July 2025. 

Rationale for the decision 

• Key employer organisations advocated for a minimum wage increase around 2.5 per cent, while the ACTU called for a 4.5 per cent increase to the National Minimum Wage. The National Farmers’ Federation (NFF) urged a cautious approach, highlighting falling agricultural production and the need to ensure minimum wage settings did not create barriers to employment in the sector. The Albanese Government, in its submission, asked the Panel to consider delivering an “economically sustainable real wage increase” to both the National Minimum Wage and modern award rates. 
• The Panel, in its decision, indicated the primary driver for the decision was the significant decline in the real value of minimum wages since 2021 due to elevated inflation. Over the past three Annual Wage Reviews, the Commission held back from reversing this decline out of concern it could entrench inflation. However, with inflation now assessed by the Reserve Bank of Australia as having returned sustainably to the 2 to 3 per cent target range, the Commission considered it appropriate to begin restoring the purchasing power of low-paid workers. 
• In the Panel's view, the labour market remained robust, with strong employment figures and solid business performance, especially in the market sector. While challenges persisted, including weak productivity growth – particularly in non-market sectors – and sector-specific risks such as in accommodation and food services, there was evidence of some capacity for businesses to absorb a modest real wage increase. Additional considerations, such as the upcoming rise in the Superannuation Guarantee and international economic uncertainties, were acknowledged as moderating factors in setting the final increase.

Recommendations  

• We advise members (including those using piecework rates or who are employing trainees or apprentices) to review their current rates of pay for all Award covered employees.
• For all members paying employees according to the Award minimum rates, this means that employees’ minimum wages will need to be adjusted effective from the first full pay period on or after 1 July 2025.
• If you are not paying at least 3.5 per cent above the Award minimum rate of pay for the relevant Award classification, you will need to increase your employees’ rates for ordinary hours of work effective from the first full pay period on or after 1 July 2025.
• Superannuation Increase: Remember that the Superannuation Guarantee rate will increase to 12% from 1 July 2025, applicable to all employees, regardless of Award coverage.

Plan ahead, but wait for specific figures

Fair Work will release updated figures for each of the Modern Awards over the next few weeks. These updates may include increases in allowance amounts. So, while it is good to be prepared and budget for the increase we recommend waiting until those Award-specific figures are released to avoid double handling and potential errors. 

The AMS will advise members as soon as the Horticulture Award specific rates are released. Members are also invited to register for the QFVG IR webinar below.

IR Unpacked: Your essential webinar for understanding IR changes & new minimum wages

From changes to IR legislation and the Fair Work minimum wage, to the Closing the Loopholes Bill and amendments to Paid Parental Leave, over the past 12 months the business community has seen a raft of legislative changes which require navigation and careful implementation. 

Join Focus HR’s Alistair Green as he breaks down:

• What is coming into effect, and the reasons behind the changes.
• What you need to know.
• How to be prepared.
• Interesting case law.
• Predictions for 2025/2026.
• Alistair will provide an overview of the changes, with guidance on how to navigate the current and complex industrial relations environment.
• The event will be informative, highly practical, and relevant for owners, managers, and HR teams. 

DATE: Wednesday, 2 July

TIME: 12:30pm – 1:30pm

LOCATION: Zoom

REGISTER

Thank you to NSW Farmers and QFVG for compiling the above information.