Kylie Thomas, Managing Director of DreamStoneHR, has created this article as part of our Locimo Experts series.
On 16 June 2021, the Fair Work Commission announced a 2.5% increase to the National Minimum Wage. Casual employees must receive at least $25.41 per hour including their 25% casual loading. This increase applies from the first full pay period starting on or after 1 September 2021. The Retail Award reflects this increase.
If you pay your employees more than the Award rate or minimum wage, that’s great. But you’ll need to check that it meets the new increase in rates before it comes into force on 1 September 2021. For employees on a salary, you’ll need to check that they meet the new Award rates and working patterns.
Here’s a helpful checklist to help you prepare for 1 September 2021:
- Is your current payroll system set up to update the Award rates/minimum wage on 1 September 2021?
- Have you checked the financial and cashflow implications of this increase? Note: this includes any related impact on holiday pay and superannuation.
- Do your salaried employees meet the new award pay rates?
- Have you reviewed pay rates for more skilled employees who are just above the new minimum rates?
- Have you planned on how you’ll communicate this increase to your employees?
It’s a good practice to prepare for increased minimum wages and Award rates well in advance. Preparation will minimise any stress for yourself and your employees.
Here are some great ways to help you keep on top of your employee entitlements.
Meet with your Accountant to review your costs and expenses in detail?
It’s not enough to keep your books in order or file your tax returns on time. Your accountant, bookkeeper or HR consultant can help ensure you’re best utilising the Award provisions. Have a chat to them about this.
Discuss with HR your overtime and wage expenses
Did you know part-time employees can work up to 38 hours per week without you paying overtime?
From 1 July 2021, you and your part-time employees can vary the employee’s regular work pattern. This is now called ‘guaranteed hours’. Varying part-time employee’s regular work pattern can either be temporary or continuing. It can even be partway through a shift.
The effect of the variation can be that the part-time employee can work up to 38 hours per week. You and your part-time employee can agree to this via email or text message.
This gives employers more flexibility to manage the ups and downs of retail without hiring extra staff.
Review your prices
Increases in minimum wage and Award rates will always happen from time-to-time. It’s unavoidable. And your competitors are in the same boat as you in this regard.
So, don’t be afraid to consider increasing your prices to ensure your business stays alive.
Hire the best employees
Unlike large corporates, small businesses can’t afford to have high staff numbers. This means it’s in your best interests to make your new hires count. With minimum wages increasing, you need to ensure you’re hiring the best people. Make sure new recruits have solid job experience and a strong work ethic. Employee retention is crucial to your bottom line.
Reach out to us if you’d like some help in making sure you get the most out of your hiring process and decisions.
Increase productivity and upskilling
Do you ever double-check that your employees are making best use of their time at work? Are they working to the best of their abilities? It’s always good to double-check this and now is a great time to do so.
How? Examine work processes and remove any workflow inefficiencies. And then find ways to streamline and improve business operations. You may identify skill gaps with employees and resolve those with onsite training.
Streamline your business offerings
Examine your current product offerings and cut back on products that do not have as wide of a profit margin. If you’ve got goods that regularly underperform, cut them out. Sell only what’s making you the best return to increase your margins.
It’s possible for your business to smoothly navigate through wage increases. You can do this through careful planning and evaluating business practices.
About the Author
Kylie Thomas is the Managing Director of DreamStoneHR. They are an agile HR Consulting Services dedicated to providing commercial solutions to growing businesses. Kylie’s background is quite varied with close to 20years of experience within the generalist HR space. If you need a helping hand to plan for government-imposed wage increases, get in touch with DreamStoneHR by email [email protected] or ring (02) 8320 9320.