Australia’s minimum and award wages will increase by 3.75%, the Fair Work Commission has announced at its Annual Wage Review hearing in Sydney this morning.

The increase, effective from 1 July, will impact about 20.7% of the country’s workforce, or 2.6 million employees, who mostly work part-time, are predominantly women, and are more likely to be low paid, the commission said.

The annual review received submissions from a range of stakeholders, including the Australian Council of Trade Unions (ACTU), which had called for a 5% increase, along with an additional increase of at least 4% for workers in feminised occupations, to help deal with rising cost-of-living pressures and recover “real wages” lost during the pandemic.

“The Fair Work Act requires us to take into account specific considerations in conducting the annual wage review,” FWC President Adam Hatcher said.

“These include relative living standards, the needs of the low-paid workforce participation, the performance and competitiveness of the national economy, and the need to achieve gender equality.

“While we have obviously taken the submissions made into account, our statutory task is to make our own assessment as to what constitutes a safety net of fair minimum wages. Our decision today is to increase the national minimum wage and all modern award minimum wage rates by 3.75% effective from 1 July, 2024.”

In determining the 3.75% increase, Justice Hatcher said cost-of-living pressures experienced by modern award reliant employees, especially those that are low-paid and live in low-income households, was the FWC’s main consideration. Despite being well below last year’s 5.75% increase, and employee households reliant on wage award wages continuing to undergo financial stress, Justice Hatcher said the FWC concluded it was not appropriate at this time to increase award wages above the current inflation rate for labour productivity reasons.

The decision by the FWC sets an increase to award minimum wages and the National Minimum Wage (NMW).  This will give an increase to the many workers who are under an Award such as cleaners, security guards, retail and hospitality workers. The FWC decision sets new minimum rates for the 121 modern Awards workers can be covered by. If you are already being paid more than the minimum in the Nurses Award (the case for the majority of nurses and midwives), you may not see a difference. For those workers who are on the minimum set by their Award, they will see an increase from 1 July 2024. The decision is made under the Fair Work Act 2009 and therefore has no bearing on nurses and midwives employed under state industrial legislation. Check in with your state or territory ANMF branch for details on your circumstances.

The ACTU welcomed the FWC’s decision, which means a full-time worker on the minimum wage will be $33.11 better off each week.

However, it expressed its disappointment that the Commission is not acting immediately to provide interim pay rises to workers in key feminised occupations, including early childhood educators and other care workers.

“Any day working people get a pay rise is a good day,” ACTU Secretary Sally McManus said.

“This decision allows people to keep up with inflation and have a small real wage increase. If employers got their way, Australian workers would’ve seen a significant real wage cut while facing cost-of-living pressures.

“The Fair Work Commission has accepted our argument that the wages of workers in feminised industries need to be higher, though they haven’t agreed with us that it should start immediately. Unions will continue to fight for these increases through the process the Commission has established.”

In handing down its annual minimum wage decision, the FWC also announced it will establish a program for the timely resolution of gender undervaluation issues in respect to certain modern awards, following a gender-equity research project undertaken as a result of the decision in last year’s review.

Priority areas to examine and address gender undervaluation will include modern awards and classifications applicable to early childhood education and care workers, disability home care workers, social and community services workers, dental assistants, medical technicians, psychologists, and other health professionals and pharmacists. The FWC said the proceedings would commence shortly and be completed by the time of next year’s review, which will then move on to the consideration of other gender undervaluation issues.