New financial year - new employment thresholds

The beginning of a new financial year brings with it some minor, but noteworthy, changes which impact on employment rights and entitlements.  In this Bulletin, we highlight those changes which take effect 1 July 2012, and encourage Bartier Perry clients to take note.

• The national minimum wage for non-award employees or those who are not covered by an agreement has risen to $606.40 per week, or $15.96 per hour and the casual loading rate is increased to 23% for this group of employees;

• Modern Award wage rates are increased by 2.9%.  All Modern Awards have been re-issued to contain the new rates, so make sure you are looking at the current version if you are referring to a Modern Award;

• The transitional provisions have moved into the next phase for the first full pay period after 1 July 2012 so care needs to be taken if you are transitioning from previous transitional instrument rates to the Modern Award rates;

• Now is a good time to check that you are still paying above the Modern Award rates for employees who receive an ‘all-up’ remuneration package, or a higher pay rate under a contract of employment;

• The “high income threshold”, which is relevant for access to unfair dismissal remedies for non award covered employees, is now $123,300.  This still excludes superannuation and amounts which cannot be determined in advance, such as some bonuses or commission;

• The compensation cap on damages for unfair dismissal has increased to $61,650;

• The maximum contributions base for superannuation has risen to $45,750 (or $183,000 per annum);

• The tax-free component for bona fide redundancy employment termination payments has risen to $8,806 for the first year; and $4,404 for each completed year of service; and

• The concessional tax treatment for employment termination payments has changed. You should consider getting specialist financial advice if this is an issue that affects your business.