Superannuation, Minimum Wage and Unfair Dismissal - EOFY Changes

Posted on 01 August 2013

The new financial year is now well underway and as we begin August, here is a reminder about changes to superannuation, wages and unfair dismissal claims which came into effect on 1 July 2013.

1. Superannuation Guarantee

The new rates took effect from 1 July 2013 with contributions rising initially from 9.00% to 9.25% and then rising further at the beginning of each subsequent financial year. This will bring the Super Guarantee rate to 12.00% by 2019. See the table below for the annual increase schedule:

Financial Year

% change per year

New Rate

2012-13

 

9.00%

2013-14

+ 0.25

9.25%

2014-15

+ 0.25

9.50%

2015-16

+ 0.50

10.00%

2016-17

+ 0.50

10.50%

2017-18

+ 0.50

11.00%

2018-19

+ 0.50

11.50%

2019-20

+ 0.50

12.00%

Businesses will need to ensure they are prepared. Preparation not only covers the manner in which employers will implement the increased superannuation payment, but it also covers the method each business will use to ensure their staff understand what will occur regarding their own superannuation remuneration. Under the normal process of staff engagement, one of three methods of remuneration is undertaken:

A) a base salary plus super and other negotiated benefits,
B) a fixed remuneration package or
C) an individually negotiated combination of A & B.

Employers will need to look at the remuneration package relating to each individual staff member and ensure that they have both implemented and communicated clearly the affect the changes will have on the staff members salary and how the new superannuation guarantee amount will be calculated and then paid. Care should be taken to ensure that employers don’t create a situation where employees may be able to allege breach of contract or underpayment of wages by improperly implementing the change to the super guarantee. Whilst it may be possible to absorb the increase in the super guarantee into some employees salaries this will not be the case for all.

Employers should also be aware that the upper age limit for superannuation guarantee payments to mature workers has been removed and eligible employees 70 years and older will need to be paid according to the scale above also.

2. National Minimum Wage

An increase to the National Minimum Wage for non-award workers also took effect from July 1 2013. The rise now sees the minimum wage, before statutory superannuation, rise from 2013 FY - $606.40 per week ($15.96 per hour) to 2014 FY - $622.20 per week ($16.37 per hour).

3. Unfair Dismissal

The High Income Threshold for Unfair Dismissal applications has increased from 2013 FY - $123,300.00 to 2014 FY - $129,300.00.

The Maximum Compensation that can be awarded in an Unfair Dismissal Applications has also increased from 2013 FY - $61,650.00 to 2014 FY - $64,650.00.

Should you require any further information please contact Dooley & Associates. Our Workplace Law team can assist you with all aspects of the employment relationship whether it be contracts, policies, employee entitlements or general employment issues.

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