State minimum wage increases 2.5%

The WA Industrial Relations Commission has imposed a 2.5 per cent increase to the State minimum wage and award rate of pay, raising doubts as to whether the State industrial relations (IR) system meets the needs of business.

The increase, announced Thursday (June 24), means employers under the State system will have to pay a $779.90 per week minimum wage to workers as of July 1 – an increase of $19 a week.

This follows the Federal annual wage review last week, which saw the national minimum wage increase to $772.60 per week – also a 2.5 per cent rise.

However, for those industries most affected by ongoing lockdowns and restrictions – hospitality, accommodation, tourism and personal services sectors – the national increase has been delayed to November 1 and September 1 for general retail.

CCIWA Chief Economist Aaron Morey said the State decision reflected WA’s inflexible IR system, which does not allow the Commission to factor in circumstances impacting WA’s range of industries.

“WA’s small businesses are effectively punished for their proximity to our successful mining sector, whose world-leading performance has long propped up our headline economic results,” he said.

“Snap lockdowns, border closures and other COVID-19 restrictions also have greater impact on small businesses in sectors like tourism, hospitality, retail and personal services.”

In addition, WA’s small businesses in the hospitality, accommodation, tourism and personal services sectors will have to start paying higher wages months earlier than incorporated competitors.

CCIWA Principal Workplace Relations Advisor Paul Moss said the decision may prompt some businesses to exit the State system for its Federal counterpart.

“This decision reinforces the ongoing concerns about the inability of the State industrial relations system to meet the needs of the small businesses it applies to,” he said.

“The higher minimum wage is compounded by a more restrictive unfair dismissal system, an award system that has been neglected for the last 15 years, and less flexibility in establishing terms and conditions of employment relevant to the business.

“For many businesses there is ability to choose whether to be covered by the State or national system based on whether it operates as a sole trader/partnership of individuals or has been incorporated.”

CCIWA’s experts can help businesses explore which industrial relations system is best suited to them.

For more contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or [email protected]

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