Jobs will go following wage increase

The accommodation industry has been hit with another whopping blow as the country’s minimum wage has been increased by 2.6%. Jobs will go as a consequence.
The outcome of the Fair Work Commission review in relation to modern award minimum wages is that from the first full pay period on or after 1 July 2013 minimum weekly wages are increased by 2.6%, with commensurate increases in hourly rates on the basis of a 38 hour week.

The increase applies to minimum wages for junior employees, employees to whom training arrangements apply and employees with disability, and to piece rates through the operation of the methods applying to the calculation of those wages. Wages in the NTWS will be adjusted by 2.6%.

The national minimum wage order will contain:

(1) a national minimum wage of $622.20 per week or $16.37 per hour,

(2) two special national minimum wages for award/agreement free employees with disability: for employees with disability whose productivity is not affected, a minimum wage of $622.20 per week or $16.37 per hour based on a 38 hour week, and for employees whose productivity is affected, an assessment under the supported wage system, subject to
a minimum payment fixed under the SWSS,

(3) the apprentice wage provisions and the NTWS in the Miscellaneous Award 2010 for award/agreement free employees to whom training arrangements apply, incorporated by reference and a provision that adult apprentices should not receive less than the national minimum wage, and

(4) a casual loading of 24% for award/agreement free employees.

Unions branded the 2.6% increase a “kick in the guts” for the working poor.

But bosses insisted they could not afford the $1.5 billion “body blow” to their wages bill over the next year and predicted companies would lay off more workers.

In handing down his decision, FWC president Iain Ross spoke of a widening gap between Australia’s lowest paid and average wage earners. He said minimum wages “have not kept pace with the level of wage increases generally” over the past decade.

The new minimum wage of $622 per week is less than half the average full-time wage of $1396, which rose 4.5 % in the year to November.

But the $16.37 hourly rate is the highest in the developed world. OECD data for 2012 shows that Australia pays well above the $7.10 minimum wage in the United States, $11.70 in France, $9.80 in Canada, $9.40 in the UK and $10.70 in New Zealand.

Australian Chamber of Commerce and Industry chief executive Peter Anderson described the 41 cents per hour pay increase as a “body blow” to business. “Job security will be affected,” he said.

“Some businesses will seek to reduce working hours to maintain employment and that’s not ideal for the business, the customer or the workers themselves.”

United Voice national secretary Louise Tarrant said the increase was so small some workers would not be able to afford to heat their homes this winter.

The CEO of the Accommodation Association of Australia, Richard Munro, said the ruling will have negative consequences for the industry. “The Accommodation Association argued for any increase in the minimum wage to be capped at 1.5%, so to be hit with a 2.6% increase, is a poor outcome for a labour-intensive industry, such as ours, and smacks of union appeasement,” Mr Munro said.

“The decision does not seem to take into account the circumstances of small businesses, particularly regional business, despite the panel’s recognition that the needs of these employers had to be considered as they were a significant part of the economy and within which there was higher than average award reliance.

“Expenses for accommodation businesses are out-stripping revenue which makes for lower return on investment. It comes at a time when new costs to businesses have been introduced in the past 12 months, such as the carbon tax and the upcoming increase in the level of compulsory superannuation. Inevitably, the decision will result in further job losses in the accommodation industry.”

Given this decision and the previous two increases – which were 2.9% (2012) and 3.4% (2011) – it’s important that the pressures that businesses in our industry are under are given greater consideration.

At the same time, the Fair Work Ombudsman has announced it will conduct random record and wage audits of approximately 1200 hospitality businesses across Australia this August. Fair Work inspectors will be looking to see that employers are fulfilling their record keeping requirements and paying their staff correctly.

Employers will be required to provide documents including pay slips, time sheets, attendance records and superannaution forms.

Inspectors will also ask for the names of each employee, their employment status and their duties, and each of these documents will be reviewed accordingly.

Employers that have been selected for the campaign will be informed in the weeks leading up to the audit, however with breaches attracting penalties of up to $51,000 it is vital all employers take action now.

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