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Significant adjustments to Australia’s employment landscape come into effect today (1 July), impacting minimum wages, superannuation, unfair dismissal thresholds, and parental leave.
Speaking to HR Leader, Jess Toop, partner at Justitia Lawyers and Consultants; Michelle Dawson, managing principal of Emplawyer; and Andrew Jewell, principal at Jewell Hancock Employment Lawyers, are urging employers and HR teams to act now to ensure compliance and avoid costly pitfalls as new law changes come into effect.
“There are a number of changes to key employment-related thresholds and minimum obligations each July – and it’s important to be on top of them,” said Toop.
“The most critical changes relate to minimum entitlements. The federal minimum wage – which applies to award-free staff – is increasing by 3.5 per cent – bringing it to $24.95 per hour for full-time and part-time staff, and $31.19 per hour for casuals.
“Similarly, the minimum rates in modern awards have increased by 3.5 per cent – the current rates are available via the Fair Work Ombudsman’s website.”
Jewell spoke on the changes to the high-income threshold, which were previously touched on in an HR Leader article.
“Change to the high-income threshold – this has increased to $183,100, which means a number of higher income employees will now have access to unfair dismissal protection which they did not previously have,” said Jewell.
Dawson said: “The maximum compensation available to employees for unfair dismissal claims (for dismissals from 1 July 2025) also increases from $87,500 to $91,550.
“It is important for employers to remember, though, that high-income earners still have access to other types of dismissal-related claims when challenging their dismissals, including general protections claims, discrimination claims and common law (including breach of contract) claims, and that the available compensation is not generally capped by a maximum available compensation sum in the context of those other types of claims.”
How should employers and HR teams manage these changes?
In terms of the minimum wage rate changes, Dawson called on employers and HR teams to be aware of when they need to adjust pay rates and when they are not obligated.
“Employers should note that if they are paying an employee above the new minimum rate prescribed by the applicable award, it is not necessary to adjust those rates unless they have agreed otherwise (for example, in an enterprise agreement),” said Dawson.
“But if they have an enterprise agreement containing rates below the increased minimum award rates, they should increase their rates from 1 July 2025 so that they are paying at least the minimum.”
Toop said: “Check, check and re-check!”
“Do you have any staff who are paid based on the minimum wage or similar? If so, check and implement the pay rise that applies to them. The same goes for your award-covered staff.
“For your salaried staff – check salary levels against minimum rates of pay, check their superannuation rate and whether they are employed under a ‘total remuneration package’ arrangement.
“Prevention is better than cure – so take steps now to ensure no underpayments in the new year (and the headache that remediation entails).”
Jewell spoke about further changes that employees must be aware of, including adaptations to parental leave.
“Paid Parental Leave will increase from 22 weeks to 24 weeks as part of a phased plan to reach 26 weeks by 2026. The government will also now pay superannuation on parental leave pay, enhancing retirement savings for parents on leave who have previously missed out,” said Jewell.
RELATED TERMS
An employee is a person who has signed a contract with a company to provide services in exchange for pay or benefits. Employees vary from other employees like contractors in that their employer has the legal authority to set their working conditions, hours, and working practises.
The bare minimum that can be paid to a full-time worker each year is known as minimum wage. For temporary and part-time workers, this is prorated.
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.
