Things to Consider for FY 2022-2023

Jul 8th, 2022

As the new financial year is under way, employers and employees should take into consideration the key changes that may affect them moving forward.
National Minimum Wage Increase

The Fair Work Commission (FWC) announced an increase of 5.2% to the national minimum wage, as well as an increase to award minimum rates at $40 per week or 4.6%, whichever is greater. In practice, award weekly wages less than $869.60 will receive the $40 increase, while those higher than $869.60 will be increased by 4.6%.

The increased rates of pay will come into effect from the first full pay period on or after 1 July.
WA State Minimum Wage Increase

The Western Australian Industrial Relations Commission announced an increase to the state minimum wage. This applies to employers and employees under the state’s industrial relations system, which mainly covers unincorporated businesses located in WA.

The increase will be $40.90 per week, with the new minimum wage becoming $819.90 per week. WA state awards are set to increase by either $40.90 per week or 4.65%. In effect, award weekly rates below $887.40 will receive a $40.90 increase, while those greater than $887.40 will increase by 4.65%.

The increased rates of pay under the WA state system will come into effect from the first full pay period on or after 1 July.
Other Changes to the WA State System

For employers and employees under the WA state industrial relations system, there are new changes to be mindful of.

  • There is now an entitlement for five days unpaid family and domestic violence leave, for permanent and casual employees.
  • As of June 2022, sick leave and carer’s leave provisions have been combined as part of a single Personal Leave provision. There is no change in the entitlement to these forms of leave, however there is no longer a maximum number of hours that can be used for carer’s leave in one year.
  • Protections for employees have been increased. Certain employer actions are now prohibited, such as sham contracting, paying employees with other goods instead of money, and making unreasonable deductions from an employee’s pay for the employer’s benefit.
  • There are also additional record keeping and payslip requirements that employers must follow.
Employers should ensure they understand any new obligations, as well as the introduced prohibitions and associated penalties, while employees should be aware of their rights and entitlements under these amendments.
Changes to Long Service Leave in WA

Some amendments have been made to the Long Service Leave Act 1958, which outlines long service leave entitlements for employees across WA. The amendments include further clarification of key terms and entitlements, new transfer of business provisions, and stronger enforcement provisions including penalties for contravening the Act or failing to comply with record-keeping requirements.

Super Changes

The Australian Taxation Office (ATO) implemented changes to superannuation eligibility and how much super needs to be paid.

From 1 July, the $450 per month eligibility for super guarantee (SG) is being removed. Employees can be eligible for SG regardless of how much they earn in a month. However, employees under 18 are only entitled to SG if they work more than 30 hours per week.

Additionally, from 1 July, the super guarantee rate will increase from 10% to 10.5%. Any payments made to employees on or after 1 July must be calculated with the new rate of super, even in cases where some of the pay period occurred before 1 July. The SG rate is scheduled to gradually increase up to 12% by 2025. 

Employers should consult their accountant or contact the ATO for further advice, and ensure that payroll systems are up to date to reflect these changes.

Increase to the High-Income Threshold

The high-income threshold from 1 July will increase to $162,000. This impacts an employee’s eligibility for protection from unfair dismissal. An employee not covered by an award or enterprise agreement must have annual earnings less than the threshold in order to qualify to make an unfair dismissal claim with the FWC. The new high-income threshold also increases the amount of compensation that may be awarded by the FWC in a successful unfair dismissal claim.

FWO Priorities

The Fair Work Ombudsman announced a number of key areas that they will prioritise in the new financial year, including:
  • The university sector – the FWO has heard reports of substantial underpayments and observed that many universities lack centralised HR functions
  • Fast-food, restaurant, cafe, and agricultural sectors – the FWO continues to find high levels of non-compliance, especially given these sectors’ reliance on vulnerable workers
  • Large corporates who are non-compliant
  • Providing assistance to small businesses
Key Takeaways

Employers should ensure they understand the new changes that will impact their obligations, and heed the warning that non-compliance will be heavily penalised. It is also a fitting time to review employment contracts, remuneration, and HR policies and procedures to ensure these are legally compliant and reflective of the new changes.

Employees should take note of their rights and entitlements, and make use of regulator information channels and services that are freely available to help them understand these changes.

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