VMA to assist members following Fair Work Commission’s wage decision

As is often the case, the Annual Wage Review presented this week by the Fair Work Commission increasing minimum wage by 5.97% and a 4.75% pay boost for minimum award workers, throws up some hidden hurdles. The ripples of the review throw up a number of ramifications that the Visual Media Association (VMA) has been quick to offer guidance on for its members, committing to outline the steps now required ahead of the 1st July implementation date.

Charles Watson, GM – IR, Policy and Governance for the VMA, says: “With effect from the first full pay period commencing on or after 1 July 2026, the new adult National Minimum Wage for full-time employees working a 38-hour week will be $1,004.90 per week, or $26.44 per hour. This represents an increase from the current National Minimum Wage of $948.00 per week, or $24.95 per hour.”

“From an Awards perspective, the Commission has also determined to increase modern Award minimum wage rates by 4.75%, effective from the first full pay period commencing on or after 1st July 2026. The decision also included determinations whereby the lowest adult Award classification rates and entry-level minimum rates in Awards must meet certain minimum dollar values.”

Watson says further detail regarding these changes will be provided to members once the Commission releases the related Award determinations over the coming weeks. “The related increases to the 120-plus Award minimum rates of pay will be determined and rolled out over the coming weeks, along with adjustments to junior and apprentice rates of pay, and Award allowances, and prior to the 1st July 2026 operational date.”

“The incoming increases to Award minimum rates of pay can be absorbed into an Award-covered employee’s current rate of pay as long as the result leaves their rate of pay at least equal to the increased Award minimum rates.”

“Over the coming weeks we will work through the detailed Award determinations and provide members with updated minimum rates, compliance guidance and practical advice to assist with implementation before the 1st July commencement date.”

The Fair Work Commission believes its ruling will benefit around 2.8 million workers on minimum and award-reliant wages, also pointing out that workers reliant on award wages are disproportionately female, more than two-thirds work part-time hours, more than half are casual employees and more than a third are low-paid.

The Commission said its determination this year was ‘particularly challenging due to the wildcard of the war in the Middle East, which has disrupted oil supplies and accelerated inflation in Australia’.

It said most modern award-reliant employees were still in the position that their wage rates, in real terms, remained lower than what they were in July 2021, prior to the post-pandemic spike in inflation in 2022 and 2023. However, it said it had ‘regrettably’ decided that it would not be responsible, in the current circumstances, to award real wage increases for employees reliant on modern award wage rates that would be big enough to close the real wage gap entirely (back to 2021 levels). Instead, it decided to lift wages by the amount necessary to ensure that modern award-reliant employees generally were not worse off in real terms than they were of July 1, 2025.

The Australian Council of Trade Unions (ACTU) has welcomed the decision, saying it broadly keeps up with the cost of living and provides some financial relief for 3 million working Australians.

But the Australian Chamber of Commerce and Industry (ACCI) is disappointed with the decision. It said the increase would add to cost pressures across the economy at a time when many businesses, particularly small businesses, have very limited capacity to absorb additional costs.

The Fair Work Commission has also made an important decision about the lowest-paid classifications in modern awards. After a multi-year review, it has decided to phase out the very lowest-paid classification for ongoing employment, called C13, and make the next wage level up, C12, the lowest wage rate for ongoing employment. The adjustment will result in the lowest wage rate in the modern award system applicable to ongoing employment being $1,004.90 per week or $26.44 per hour (the same as the new minimum wage). The special entry-level wage rate, C14, which is applicable for a period of no more than six months of initial employment before it has to increase, will be $978.1 per week or $25.74 per hour.

The news received a mixed reception from leading ANZ economists, with a general view that the raises will not have a material impact on inflation, muddied by some believing the indirect impact will put pressure on the aggregate wages bill, which may add to already sticky services inflation, as businesses pass on higher labour and input costs, which have remained elevated amid rising goods prices.

Related

ASGA Victoria Golf Day officially teed up Last call for FESPA Global 2025 Print Census Sign China urges visitors to Spring into action FESPA Global Print Expo set to deliver on several levels