The Fair Work Commission has announced the annual minimum wage will receive a booster.
The minimum wage and related award minimum wages will increase by 2.5 per cent, taking the lowest amount to $20.33 per hour.
Full-time workers will receive $772.60 per week; an increase of $18.80.
It’s a big jump for the minimum wage, with last year’s increasing by 1.75 per cent.
Industry has reacted to the news, with many having campaigned for a 1.1 per cent increase instead.
Restaurant & Catering Australia (R&CA) has called the move a “setback to COVID recovery”.
“This decision, that increases the award rates at double the rate of inflation, could send thousands of small cafes and restaurants to the wall,” says R&CA CEO Wes Lambert.
“R&CA argued before the commission that an increase should have been no higher than the rate of inflation as fair and a reasonable outcome.
“This would have ensured pay did not go backwards but also ensured businesses had every chance to continue the road to recovery, with the completion of the vaccine rollout and the opening of international borders on the horizon.”
“It is unfathomable that the hospitality sector, which has been the hardest hit sector of our economy, should have to wear two wage increases within a year totalling 4.25%.”
The hospitality sector won’t have to increase wages until 1 November 2021; a four-month delay compared to other industries.
However, the 0.5 per cent increase to superannuation will also kick in from 1 July 2021 “resulting in a total increase of wage costs of nearly 5 per cent in nine months”, says Lambert.
The Australian Hotels Association (AHA) has also warned of the effects the increased minimum wage will have on operators.
“The rise in the minimum wage coupled with the superannuation increase means wages will effectively rise by three per cent this year,” says AHA CEO Stephen Ferguson.
“We must also remember that parts of Australia’s accommodation, tourism and hospitality industry continue to face significant challenges, in particular CBD hotels as well as the entertainment, meetings, conferences and events sector who continue to struggle.
“With international borders closed for the foreseeable future, it is vital that interstate travel remains open and governments around Australia look towards removing all possible trading restrictions.”