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Changes to Modern Awards in 2025: What Employers Need to Know

Changes to Modern Awards in 2025: What Employers Need to Know

The Fair Work Commission (FWC) has announced significant amendments affecting 37 modern awards, set to commence in 2025. These changes pertain to employee classification durations and adjustments in pay rates.

Key Changes:

  1. Limitation on Introductory Classification Periods:
  • Employees can remain at the lowest classification level for a maximum specified period, varying by award.
  • For instance, under the Manufacturing Award, the C14 classification will be limited to a maximum of three months, after which employees must advance to the C13 level.
  1. Increased Pay Rates for Lower Classifications:
  • Certain awards will see an increase in minimum pay rates for the lowest classification levels.
  • For example, the Children’s Services Award will raise the Level 1.1 classification rate to $915.90 per week or $24.10 per hour from 1 January 2025.
  1. Awards Incorporating Both Changes:
  • Some awards will implement both the new rules on classification durations and increased pay rates.
  • Employers should review the specific changes applicable to their industry to ensure full compliance.

Implementation Timeline:

  • The majority of these changes will take effect from 1 January 2025.
  • Notably, the Horticulture Award is scheduled for amendments on 1 April 2025.

Employer Action Items:

  • Review Applicable Awards: Determine if your business is affected by these changes by consulting the list of impacted awards.
  • Update Employee Classifications: Ensure that employees are not retained at the lowest classification beyond the newly specified maximum periods.
  • Adjust Payroll Systems: Prepare to implement the revised pay rates to comply with the updated award stipulations.
  • Stay Informed: Regularly consult official FWC communications and seek professional advice to remain compliant with all award changes.

Link to Fairwork for further info: https://www.fairwork.gov.au/about-us/workplace-laws/award-changes/changes-to-entry-level-classifications-in-awards

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