An Expert Panel of the Fair Work Commission reviews and sets minimum wages for employees in the national system each year. The Fair Work Act 2009 sets out the objectives of the review. The process includes research, submissions and consultations. Show
Content Each financial year, an Expert Panel conducts the annual wage review. The review usually takes place from March to June. The Fair Work Act 2009 requires the Panel to review:
The decision and order usually come into operation on 1 July of the following financial year. The review directly affects employees in the national system who are:
The Expert Panel must make sure all interested organisations and individuals have a reasonable opportunity to:
The Panel considers these submissions as part of the review. We publish all submissions on our website unless they are confidential or commercially sensitive. This is a requirement of the Fair Work Act. ResearchAs part of the review, the President of the Commission may direct the Panel to investigate and report on certain matters. It must publish all research so the public can make submissions on the issues it covers. The President or the Panel also set an Annual wage review research program each year. A Minimum Wages Research Group endorses the research. The chair of the group is from our Economic Analysis Team. This team carries out or requests the research. Other members of the group are representatives nominated by:
We publish Annual wage review research on our website. The resultThe Expert Panel for annual wage reviewsThe Expert Panel must consider the provisions and objectives in the Fair Work Act. This includes Part 2-6 of the Fair Work Act, which deals with minimum wages and annual wage reviews. The Panel must consider:
The Panel must also review a number of transitional instruments. This is a requirement in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. The Panel is made up of:
The part-time Members only work on the annual wage review. They must have knowledge of, or experience in, one or more of the following fields: A pay review is a formal assessment of an employee’s work performance used to determine whether they have merited a pay increase. Typically, a pay review may also factor in an employee’s tenure, changes in the market for talent or incoming budgetary concerns. Why Should You Conduct Pay Reviews?Conducting effective pay reviews is important for employees because:
How Often Do Pay Reviews Happen?Pay reviews are typically conducted annually, but some managers will perform one after the completion of a large project. They may also be performed if someone receives a promotion. Several factors are considered during the review, including market data, available budget and personal and professional goals. There’s no legal obligation to hold a pay review, but many companies do so as an added perk of their reward programme. How To Conduct a Pay ReviewA salary or pay review is often conducted in three phases. These include:
Let’s take a deeper look at them to gain a better understanding of the pay review process… Gain Access To HR Analytics That Power People StrategiesTo inform and empower your people strategy, your HR team needs to have constant access to clean and custom analytics and reports. Learn about HR analytics and reporting with Personio today. How To Prepare for the Process: The Planning PhaseThe starting point for a smooth pay review process is good preparation. These are the steps to follow: 1. Evaluate and Settle on the Pay Review ObjectivesFigure out what the pay review is meant to accomplish. Share the objectives of the meeting with everyone involved in the process. This helps manage expectations while guiding employees and other stakeholders on how to prepare for an upcoming pay review. 2. Review the Employee’s ContractConduct an audit of employment contracts to determine if certain clauses could impact the process if ignored. For example, are they entitled to a certain pay rise per year? Is their pay frozen due to a probationary period? Confirming any restrictions or obligations before the pay review process helps avoid a breach of their agreement and serious legal penalties. 3. Reread and Analyse the Job DescriptionsNext, evaluate the job descriptions for each employee’s position and determine if they properly fulfill the expectations for that role. Each description should clearly represent the level of responsibility, the tasks they’ll perform and the anticipated level of job performance. This helps create a benchmark for your employee’s achievements. 4. Examine Market Pay BenchmarksAfter examining a job description, go to an external job site and find if the employee’s current salary falls within industry standards. An internal audit of employees’ salaries can uncover serious wage discrepancies between people with similar roles, which the pay review can help correct. 5. Confirm Budgeting and DeadlinesDefine the budget you’re working with during the salary review by measuring against your established goal for the meeting. Whether offering pay increases to keep up with inflation or to reward overachieving employees, knowing your budget and the schedule for appraisal helps ensure every salary is increased fairly. 6. Conduct the Performance ReviewOnce all your planning is finished, leadership within your organisation can begin to conduct performance reviews. During the process, they evaluate how well employee performance aligns with their expectations. This framework is then used to guide the pay reviews. How To Evaluate a Candidate for Pay Review: Performance Review PhaseIt’s important for your managers or HR representatives to accurately measure an employee’s performance to avoid unfairness or accusations of discrimination. Below is an overview of how to rate your worker’s accomplishments during the pay review process. 1. Transparency Is KeyEmployees should be kept informed about what the pay review process will entail as the planning stage evolves. They should know exactly what to expect from the pay review process, including which aspects of their position will be reviewed. Springing a performance review on your staff makes it feel more like a penalty, especially if there are extenuating circumstances for a drop in performance. 2. Hand Out a Self-Evaluation FormIssue survey and self-evaluation forms before the pay reviews take place to gain greater insight into your staff. How they view their responsibilities and performance can help you identify weaknesses in their job description and find solutions for them to increase productivity. Additionally, surveys can also work as an announcement that a review is underway and give employees time to raise concerns in advance. 3. Introduce an Employee Performance Rating ScaleAn Employee Performance Rating Scale splits the responsibilities of a position into several categories you can use to rate employees in those areas. Establishing a standardised scoring system makes it easier to indicate when an employee’s performance falls above or below expectations in one or more areas. How the Inform and Process Review Phase Is ConductedThe last step of the typical pay review process is to communicate results and feedback to your staff. Employers generally send out salary review letters containing the review’s outcome, any ensuing changes to the employee’s pay and the exact reason why their pay is being increased. This helps ensure that the process is seen as transparent, fair and objective. Frequently Asked Questions About Pay ReviewsWhat Are Pay Reviews?A pay review assesses an employee’s performance vs expectations to determine if their salary should increase. How Long Does a Salary Review Take?The length of a salary review can vary from employee to employee, depending on the complexity of the position and how well they’ve been performing. How Often Are Pay Reviews Conducted?Pay reviews are typically conducted annually. In some organisations, pay reviews may be conducted more frequently, timed to the completion of a big project. They may also be held upon a promotion or job title change. Are You Obligated To Perform a Pay Review?Organisations are not required to perform a pay review. However, many organisations do so because it’s a part of the company’s rewards programme. Even if it’s not required, it’s still important to review the employee contract to ensure all requirements in regard to salary are met. What Factors Are Evaluated During the Pay Review Process?The pay review process involves analysing several factors. A performance review is involved to ensure the employee met and exceeded expectations for the position. A market review is also conducted to ensure the employee’s salary is in line with what other companies offer. The organisation’s budget is also taken into consideration. What Does the Planning Phase in a Pay Review Process Include?The planning phase of the pay review process involves:
What Does the Performance Review Phase Include?The performance review phase of the salary review process involves:
Conduct Your Next Pay Review With PersonioThe pay review process can be time-consuming given the amount of performance data you have to gather on your employees. Personio helps make this easier with its performance tool that easily tracks how your staff handles their tasks while providing holistic feedback on your schedule. How often should wages be reviewed?Each financial year, an Expert Panel conducts the annual wage review. The review usually takes place from March to June. Go to the most recent Annual Wage Review 2023–24. the national minimum wage order from the previous annual wage review. How often does your salary increase?Pay increases tend to vary based on inflation, location, sector, and job performance. Most employers give their employees an increase of around 3% per year. Consistent job switching may have an impact on the rate at which your salary increases. How often should your wage go up?Typically, most organisations review employee performance and salaries once a year. In the past, it was typical for pay to rise at least in line with inflation, which is ideally at 2-3%, but with inflation at 7% many workers are receiving pay increases less than this meaning they're going backwards in real terms. Are you entitled to a pay rise every year in Australia?Most commonly, an employer will have absolute discretion to decide whether an employee gets a bonus or pay rise. However, an employee may have a right to claim a bonus or pay rise as a legal entitlement: Under his/her contract; Under a policy; or. |