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Employment Law Update - What is changing from 1 July 2022?

Employment Law Update – What is changing from 1 July 2022?

Published on June 29, 2022 by Janine Smith and Wing Ho | 何宛穎律師Janine Smith and Wing Ho | 何宛穎律師

The new financial year ushers in all sorts of legislative changes affecting employers and employees in Australia.  Below is a convenient summary of the changes taking place from 1 July 2022:

  1. Increase to high income threshold and maximum compensation available for unfair dismissal applications

The statutory high income threshold for unfair dismissal applications will rise from from $158,500 to $162,000.  The operation of s382(b) of the Fair Work Act 2009 (Cth) means that employees who are not covered by an award or enterprise agreement and earn more than the high income threshold will be prevented from making an unfair dismissal application.

The maximum compensation that can be awarded in an unfair dismissal claim lodged after 1 July 2022 has increased from $79,250 to $81,000.

  1. Increase to Fair Work Commission (FWC) filing fees

The FWC has increased its filing fee for unfair dismissal, general protections, anti-bullying and anti-sexual harassment applications from $74.90 to $77.80.

  1. Increase to minimum wages

The FWC recently completed its Annual Wage Review and decided to increase the national minimum wage by 5.2% effective from 1 July 2022.  The new national minimum wage will be $812.60 per week, or $21.38 per hour.

The FWC also decided that Modern Award minimum wage rates below $869.60 per week will increase by $40 per week and Modern Award minimum wage rates above $869.60 per week will increase by 4.6%.  By awarding a proportionally greater wage increase for low income earners, the FWC has departed from its previous practice of awarding a uniform wage increase across all wage classifications.  FWC has done so recognising that Australia faces a challenging economic environment, with inflation being significantly higher than at the time of the previous Annual Wage Review.

Wage increases for most Modern Awards will take effect on 1 July 2022.  However, wages under the Awards covering the aviation, tourism and hospitality industries will not increase until 1 October 2022.[1]

  1. Increase to superannuation guarantee contribution

From 1 July 2022, employers will be required to contribute 10.5% of an employee’s ordinary time earnings.

  1. Removal of $450 monthly pre-tax income threshold for superannuation guarantee contributions

The $450 monthly pre-tax income threshold for superannuation guarantee contributions will be removed from 1 July 2022.  This means that employers will need to pay superannuation guarantee contributions for all employees, regardless of how much they earn.

  1. Increase to tax-free component of a genuine redundancy payment

For genuine redundancy payments made in the 2022-23 financial year, the tax-free component will increase to $11,591 + $5,797 for each completed year of service.

If you would like further information or advice about an employment related matter, please contact the Workplace Law team at Carroll & O’Dea Lawyers.

[1] For the full list of the Awards, please see paragraph [454] of the Annual Wage Review 2021-22 decision.

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