1 July 2023 is a date for the diary. The first day of the new financial year brings a number of changes for organisations. Many of these changes stem from the Annual Wage Review Decision (“AWRD”) of the Fair Work Commission (“FWC”). This year, there are some additional workplace changes which commence on 1 July 2023 including changes to superannuation and paid parental leave.

National minimum wage and modern award wages

In accordance with the AWRD, the national minimum wage will increase to $882.80 per week or $23.23 per hour (an increase of 8.6%). The minimum modern award rate will also increase by 5.75%.

These changes must be applied from the first full pay period on or after 1 July 2023.

Superannuation

In addition, the superannuation guarantee rate will increase from 10.5% to 11%. This rate is increasing by 0.5% annually until it reaches 12% in July 2025.

The application of this increase will depend on the structure of an employee’s contract. For employees who are paid an amount of remuneration inclusive of superannuation, the overall payment made by their employer will not change, but they will see a decrease in their take-home pay. For employees who are paid a base amount plus superannuation, they will see an increase in their overall pay as their employer will be required to make the additional 0.5% superannuation contribution payment.

High income threshold

The high income threshold for unfair dismissal applications will increase from $162,000 to $167,500, while the maximum compensation that can be awarded by the FWC increases from $81,000 to $83,750 for post-July 1 unfair dismissal claims.

Employees who earn more than the high income threshold are unable to make claims for unfair dismissal unless they are covered by a modern award.

Unfair dismissal fees

The filing fee for unfair dismissal, general protections and anti-bullying/sexual harassment applications made under the Fair Work Act 2009 (Cth) (the “FW Act”) will increase from $77.80 to $83.30.

Paid parental leave

From 1 July 2023 there will be more flexibility introduced to the paid parental leave scheme. Instead of 18 weeks of parental leave pay and two weeks of dad and partner pay, these will be combined to provide 20 weeks of paid leave which can be shared.

The eligibility income test is also changing with a family income limit being introduced. If an individual does not meet the individual eligibility income test of $156,647, a family income limit of $350,000 will be applied to assess eligibility.

Fair Work small claims process

There are also changes to the Fair Work small claims process, where the cap on the amount that can be awarded will increase from $20,000 to $100,000. The small claims process is an accessible procedure which will now be more attractive to a greater number of workers seeking compensation.