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More SMBs to struggle under next wave of wage increases

Employsure, Australia’s largest workplace relations advisor, urges employers covered under Group 2 Awards to ensure they’ve updated their payroll, as the national minimum wage increases.

As of November 1, the national minimum wage has increased by 1.75% per cent to $19.84 per hour, a $0.35 hourly rate rise, for workers in construction, mining, manufacturing, and a range of other industries. In other words, a full-time employee now receives a $753.80 per week, an increase of $13.00.

“This increase comes at a time when a number of businesses simply can’t afford it,” said Ed Mallett, Managing Director of Employsure.

“Hundreds of businesses who were on the original JobKeeper wage subsidy scheme are now either no longer eligible, or are on the new reduced payment, scheduled to drop again at the start of next year.

“Many of our clients have told us they haven’t fully recovered from the financial fallout this year as a result of COVID-19, and sadly, some have, or will have to close as a result.”


Understanding minimum wages in Australia is one of many crucial elements an employer should be aware of when running a business. Employers and employees cannot legally be paid less than their applicable minimum wage, even if they agree to it.

When it comes to an employee’s minimum wage, their minimum entitlements under the relevant Award or agreement need to also be factored in. These entitlements are set apart across a variety of factors such as industry, job type and experience in the role, and is therefore important for employers to understand and abide by.

The wage increase will have an administrative and financial impact on the bottom line, as it does every year. However, businesses shouldn’t see the change as a time to consider reducing staff numbers or increase product costs.

“While wage increases are a challenge for any business to implement, it does present an opportunity to improve financial health. Being creative with cost savings and identifying new efficiencies can help a business manage when wages increase.

“I believe a freeze to the minimum wage in the future will help support the country’s economic recovery. We last saw it happen in 2009 due to unemployment concerns from the global financial crisis, and a global pandemic shouldn’t be any different,” concluded Mr Mallett.


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