Annual Wage Review 2024-25

BY OWEN WEBB & SARAH LEGOE

On 3 June 2025, the Fair Work Commission Annual Wage Review Panel (Panel) handed down their decision in the 2024-25 Annual Wage Review. In this article we look at the increase that was awarded, the impact for hotels and what preparation is required to ensure that hotels are compliant with the changes.

Modern Award Wages

The Panel decided to increase the National Minimum Wage and all modern award minimum wage rates by 3.5% effective from the first full pay period commencing on or after 1 July 2025.

As a result, those employees employed pursuant to Modern awards in the hotel and retail sector such as the Hospitality Industry (General) Award 2020 (HIGA), Restaurant Industry Award 2020 (RIA) and General Retail Industry Award 2020 (GRIA), will see their base rate of pay increase by 3.5%.

The minimum wage will increase from $915.90 per week, or $24.10 per hour, to $922.70 per week or $24.28 per hour from the first full pay period on or after 1 July 2025.

Considerations

The Panel as part of the Annual Wage Review process received submissions from various interested parties including state and federal governments, unions and employer associations.

The Australian Council of Trade Unions sought a 4.5% increase to minimum and award wages. The Australian

Chamber of Commerce and Industry supported an increase in minimum and modern award wages of no more than 2.5% (plus the final legislated 0.5% Superannuation Guarantee increase in 2025).

In determining the level of the increase, the Panel too into account a number of factors including the current level of inflation, the impact a wage increase may have on inflation moving forward, business profit growth, labour market strength together with the consistently low productivity figures from the nation and the fact the superannuation guarantee was to increase by a further 0.5% on 1 July 2025.

Wage Schedules

The AHA|SA will prepare updated wage schedules reflecting the Panel’s change to award rates of pay. The schedules will be available to download from the Workplace Relations Tab on the AHA|SA website prior to 1 July 2025. Wage schedules are available for the following Awards:

• Hospitality Industry (General) Award 2020

• Restaurant Industry Award 2020

• General Retail Industry Award 2020

• Registered & Licensed Clubs Award 2020

A more detailed Wage Rate and Allowances Guide for the Hospitality Industry (General) Award 2020 and the General Retail industry Award 2020 has been developed and is also available on the AHA|SA website.

Enterprise Agreements

Those members who have an Enterprise Agreement in place will be affected if the wages in their agreement are less than the minimum rates in the relevant modern award as at the first full pay period commencing on or after the 1 July 2025.

In accordance with section 206(1) of the Fair Work Act 2009 (Cth) the base rate of pay under an enterprise agreement must not be less than the base rate of pay that would be payable to the employee under the modern award if the modern award applied.

Salary Arrangements

Members will need to review any salary arrangements for Award or Enterprise Agreement covered employees and which have been calculated in accordance with an applicable Award or Enterprise Agreement to ensure the salary is sufficient in line with the relevant Award or Enterprise Agreement provisions.

Annualised Wage Arrangements

( CLAUSE 24 OF HIGA, CLAUSE 20 OF RIA )

Members need to ensure that they review the salary of an employee who is paid pursuant to clause 24 of the HIGA – Annualised Wage Arrangements or clause 20 of the RIA. An employee who is paid under an Annualised Wage Arrangement under either of these Awards must be paid at least 25% more than the minimum wages prescribed in the relevant Award for the work being performed. Accordingly, such employees’ salaries need to be reviewed to ensure that they are at least 25% more than the new weekly wage prescribed the relevant Award for the wage level applicable to the employee’s position effective from the first full pay period on or after 1 July 2025.

SALARIES ABSORPTION ( MANAGERIAL STAFF ( HOTELS )) (CLAUSE 25 OF HIGA )

Members need to ensure that for any managerial employees who are paid a salary in accordance with clause 25 of the HIGA – Salaries Absorption, the salary needs to be at least 25% above the minimum annual salary in clause 18.2 of the HIGA – Managerial staff (Hotels).

Salaries Above Minimum Award Obligations

Whilst clause 24 and clause 25 of the HIGA (and clause 20 of the RIA) place obligations on employers to ensure that their employees are paid at least the minimum salary in those respective clauses, some members will be paying salaries that are well above the minimum salary obligations in these clauses.

If an employee is paid a salary well above the employer’s minimum salary obligations under clause 24 and clause 25 of the HIGA or clause 20 of the RIA, the employer does not have to increase the employee’s salary by the percentage increase awarded in the Annual Wage Review, provided the employer is still meeting the minimum salary obligations under these clauses and there is no clause in the Contract of

Employment that would require an increase to be provided.

INDIVIDUAL FLEXIBILITY ARRANGEMENT ( IFA )

If an Individual Flexibility Arrangement (IFA) is in place between an employee and their employer in accordance with a Modern Award or an Enterprise Agreement, members will need to review the IFA to ascertain whether any increase to the modern award wages affects the IFA. Remembering that an IFA must result in the employee being better off overall at the time the IFA is made than if the IFA had not been made.

Payroll Providers

Hotels that use an external payroll provider should communicate with their provider to ensure that the new rates effective from the first full pay period on or after 1 July 2025 are loaded into the payroll system.

Award Or Enterprise Agreement Free Employees

Members should refer to the Contract of Employment to determine whether the wage or salary of an Award or Enterprise Agreement free employee needs to be reviewed at this time, and if that review needs to be conducted in line with the decision of the Fair Work Commission. If the contract is silent on a wage review, then it will be up to the employer and the employee to determine when (and if) the wage or salary is reviewed and if any increase is awarded.

Superannuation Changes From 1 July 2025

The Superannuation Guarantee percentage rate payable to employees will also increase by 0.5% on 1 July 2025 to 12%. The new rate will be applicable from 1 July 2025, not the first full pay period on or after 1 July 2025. This is currently the final legislated increase to the superannuation guarantee rate.