8 October 2024
Dr Pamela HanrahanKate NaudeArmen Shiraz-Dilanchian
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The start of the new financial year brought about a number of changes to employment law monetary requirements in Australia, including with respect to superannuation, civil penalties and minimum wages. These changes came into effect on 1 July 2023 and are set out below.
Implications for employers
Employers should take steps to audit their payroll compliance to ensure that employees are not being underpaid. This is particularly important in the current climate, given the recent emphasis that the Fair Work Ombudsman (FWO) has placed on compliance and enforcement in relation to wage underpayment. In particular, outgoing Ombudsman Sandra Parker recently announced that the FWO uses compliance notices as the default tool for small to medium businesses (except in the case of systemic or deliberate underpayments). For large businesses the FWO may prosecute employers if they do not cooperate or refuse to meet their obligations. In addition, there has been a continued trend of underpayment class actions and regulatory proceedings being commenced against major employers and franchisors, such as the proceedings against Aldi, Bakers Delight (as franchisor) and The Reject Shop.
Key changes
| Penalties under the Fair Work Act 2009 (Cth) (FW Act) | The value of a penalty unit increased from $275 to $313. This means that the maximum penalties under the FW Act have increased to $18,780 per contravention for individuals and $93,900 per contravention for corporations. For serious contraventions, the maximum penalties under the FW Act have increased to $187,800 for individuals and $939,000 for corporations. |
| Superannuation | The superannuation guarantee percentage has increased from 10.5% to 11%. The maximum superannuation contribution base has increased from $60,220 to $62,270 per quarter. |
| High Income Threshold and Compensation Limit | The high income threshold has increased from $162,000 to $167,500 The compensation limit for unfair dismissal claims is now $83,750. |
| Tax-Free Part of Genuine Redundancy Payments | The base limit for genuine redundancy payments has increased from $11,591 to $11,985. The limit has increased from $5,797 to $5,994 for each completed year of service. |
| Modern Award Minimum Wage | The minimum wage under modern awards has increased by 5.75%. |
| National Minimum Wage | The national minimum wage has increased to $23.23 per hour and $882.80 per week. |
Johnson Winter Slattery is currently assisting a number of employers to audit and rectify their payroll compliance to avoid underpayments as a result of the recent changes and historical payroll issues. If you would like further information on how these changes might impact you or your business, please reach out to a member of our Employment team.