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Comprehensive Updates to Modern Award Classifications and Minimum Pay Rates

Writer's picture: Faye AbsalonFaye Absalon

From January 2025, businesses across Australia will need to adapt to significant changes in modern awards. These updates will address issues such as introductory roles, pay classifications, and minimum wage compliance. The goal is to ensure employees are fairly compensated and that employers meet their legal obligations. For businesses, this is an opportunity to review and refine their payroll and classification practices.


Understanding the Key Changes

  1. Introductory Classifications

    Introductory roles are entry-level positions where employees undergo training or learn new skills. Under the new rules:


    • A time limit of six months will apply to these roles. Employees cannot remain in introductory positions indefinitely.

    • Once the six months lapse, employees must progress to higher classifications that align with their experience and responsibilities

    • This change aims to prevent businesses from using entry-level roles as a loophole to underpay skilled workers.


  2. Minimum Pay Rates


    • Updated minimum pay rates for introductory classifications will ensure that all employees earn at least the National Minimum Wage.

    • These changes apply across various industries and are designed to align wages with employees’ contributions and legal entitlements.


Industries Affected and Timelines

The updates will be rolled out in two phases:


  • Phase 1: Effective from January 1, 2025, awards in industries such as aviation, manufacturing, fitness, and live performance will see immediate changes.

  • Phase 2: From April 1, 2025, awards in agriculture, particularly the Horticulture and Pastoral Awards, will undergo similar updates.


For a full list of affected awards, employers should consult the Fair Work Commission website.


What These Changes Mean for Employers

These updates bring two main implications for businesses:


  • Compliance Requirements

    - Payroll systems and enterprise agreements must reflect the updated award conditions to avoid legal risks or penalties.


  • Opportunities for Improvement

    - By aligning pay structures with these updates, businesses can foster greater employee trust and satisfaction.


Tip: Vivid can perform a detailed review of your payroll and classification practices to ensure compliance with the new standards, saving you time and reducing legal risks.


The changes to modern awards in 2025 highlight the importance of fair pay and proper employee classification. By taking a proactive approach and leveraging expert support, businesses can navigate these updates smoothly while building a more equitable workplace.


If you’re unsure where to start, please do not hesitate to reach out and contact us.


Disclaimer: This article is intended to provide general guidance and is not specific advice. We encourage you to seek tailored advice for your circumstances.


 

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