The Fair Work Commission has handed down its Annual Wage Review decision, announcing a 3.5% increase to the National Minimum Wage and all modern award wages, effective from the first full pay period on or after 1 July 2025.
Our friends at Forvis Mazars HR and IR Consulting team explain what this means for your swim school workforce.
Award-Covered Employees
Most employees in swim schools are covered by the Fitness Industry Award 2020, or in some cases, other awards depending on the services you offer.
Employees Paid at Award Rates
If you are paying employees at the minimum award rates, you will need to:
- Apply the 3.5% increase from the first full pay period on or after 1 July 2025.
- Review and update pay rates in your payroll system.
- Check any allowances that may also increase.
Employees Paid Above Award Rates
If you pay employees above the award minimum, you are not automatically required to pass on the 3.5% increase. However:
- You must ensure that employees are still being paid at least the new minimum award entitlements (including applicable penalties and allowances).
- If you are offsetting award entitlements (for example, paying a flat hourly rate or salary that covers overtime, allowances, etc.), make sure:
– The contract includes a clear and industrially sound offset clause; and
– The total pay still leaves the employee better off overall under the new award rates.
If you are unsure whether your current rates or contracts are compliant post-increase, now is a good time for a review.
What does “the first full pay period on or after 1 July” mean?
This means the increase doesn’t necessarily apply from 1 July itself, but from the start of your next full pay period that begins on or after 1 July.
For example:
- If your pay week runs from Monday to Sunday, the increase will apply from Monday 7 July 2025.
- If your pay fortnight runs from 30 June to 13 July, the increase won’t apply until the next full pay period begins. In this example, the increased would apply from 14 July 2025.
Enterprise Agreements
If your employees are covered by an Enterprise Agreement (EA):
- Check the wording of your EA. If it includes a clause that ties pay increases to the Annual Wage Review (for example, “employees will receive an increase equivalent to the annual wage review”), then you must pass on the 3.5% increase from the applicable full pay period after 1 July 2025.
- If the EA does not automatically pass on increases, which is the most common Agreement terms, you are not required to apply the 3.5% increase, but you must ensure that base rates of pay for employees remain equal to or higher than the new Award rates.
Employees Not Covered by an Award or EA
For employees not covered by an award or enterprise agreement, the National Minimum Wage will rise to reflect the 3.5% increase. From the first full pay period after 1 July 2025, you will need to ensure these employees receive no less than the new minimum rate.
The new national minimum wage will be $948.00 per week (for full time employees) or $24.95 per hour.
What You Should Do Now
Audit your current pay rates and allowances against the new rates once published.
- Update your payroll system before the first full pay period in July.
- Communicate changes to your employees.
If you need assistance working through award obligations, enterprise agreement clauses or contract wording, please get in touch.
HR and IR Contact:
Stephanie Sheppard, Senior Consultant
Forvis Mazars – HR and IR Consulting
+61 7 3218 3063
