Employers should note the following new rates and thresholds that apply from 1 July 2019.
1. National minimum wage
From 1 July 2019, the national minimal wage is $740.80 per week or $19.49 per hour based on a 38 hour week. This is an increase of $21.60 per week to the previous national minimum weekly rate.
2. Minimum award wage rates
Minimum wage rates in modern awards increase by 3% from the first full pay period on or after 1 July 2019 but the casual loading will remain at 25%.
3. Superannuation contributions
Employers must continue to contribute 9.5% of an employee’s ordinary time earnings to a complying superannuation fund. From 1 July 2019, the maximum superannuation contribution base is $55,270 per quarter. This means that employers must contribute 9.5% of ordinary time earnings to $55,270 per quarter. Employers are not required to make contributions above this threshold unless they have agreed with an employee to do so.
4. High income threshold
The high income threshold in relation to unfair dismissal claims increased to $148,700 per annum from 1 July 2019. This means that on and from that day:
- employees cannot file an unfair dismissal claims if their annual earnings are at least $148,700 unless they are covered by a modern award or enterprise agreement; and
- the maximum compensation that can be awarded to an employee in unfair dismissal proceedings will be $74,350.
When calculating earnings for the purpose of the high income threshold, the following are included.
- any amounts applied or dealt with on the employee’s behalf (for example salary sacrifice amounts); and
- the agreed monetary value of any non-cash benefit (for example, use of a company car, laptop or mobile phone).
The following will not be included as part of an employee’s earnings:
- payments that cannot be determined in advance (for example commissions, incentive‑based payments and bonuses and overtime unless the overtime is guaranteed);
- reimbursements for business expenses; and
- superannuation guarantee contributions.
5. Redundancy tax threshold
The tax-free component of a genuine redundancy payment is:
- a base amount;
- plus a service related amount multiplied by the employee’s completed years of service.
From 1 July 2019, the base amount is $10,638 and the service related amount is $5,320.
In addition to the revised rates and thresholds, new Australian whistleblower laws also came into effect on 1 July 2019. Gilbert + Tobin have outlined our top 5 practical challenges facing Australian companies from the new laws and what you need to think about and do to address these challenges. If you have any queries about the new rates and thresholds, or the whistleblower laws, please do not hesitate to contact our Employment team.