Published April 2023

The Fair Work Commission (the Commission) has decided to increase minimum wages by 15% for some employees covered by the following awards:

• Aged Care Award
• Social, Community, Home Care and Disability Services Industry (SCHADS) Award
• Nurses Award

Increases take effect from the first full pay period commencing on or after 30 June 2023.

Why the 15% increase?

The Full Bench of the Fair work Commission (FWC) has been reviewing wages in these 3 awards as part of a work value case for the aged care sector. According to the FWC, it recognises that work in these feminised industries has been “historically undervalued” – likely due to gender. It also recognised how work undertaken by these employees has changed significantly in the past two decades.

The Fair Work Commission (the Commission) issued a decision on 4 November 2022 to grant a 15% interim increase in minimum wages for affected aged care employees in the 3 awards. This final decision was published on 21 February 2023.

The three unions – the Australian Nursing and Midwifery Federation (ANMF), Health Services Union (HSU) and United Workers Union (UWU) – lodged applications with the FWC requesting a 25 per cent increase. The Full Bench is hearing these applications to vary the awards and increase the minimum wages of aged care sector workers by 25% in three stages.

Union members have continued the campaign for a 25 per cent pay increase across the entire workforce which the FWC is still considering.

In the Stage 1 decision, the Commission decided that an interim increase of 15% to the Award minimum wages of direct aged care workers was ‘plainly justified by work value reasons.’ The decision acknowledged that the workforce ‘has been historically undervalued’ due to gender-based reasons.

In the Stage 2 decision the Commission confirmed that the 15% increase would apply to direct care workers, but that it should also apply to more people working in aged care than previously decided, including:

• Head Chefs/ Cooks under the Aged Care Award; and
• Recreational Activities Officers/ Lifestyle Officers under the Aged Care Award.

In Stage 3 the Full Bench will consider whether the 15% increase should be further increased. The next stage will also consider in detail the classification definitions and structures in the Awards, as well as potential wage increases for the workers not already covered by the recent decisions (including support staff members).

The unions have indicated that they will continue to push the full 25% percent and for the pay rise to be applied to everyone working in the aged care industry.

The Commission is still considering some other issues in the work value case. This includes:

• classification definitions and structures in the 3 awards;
• wages adjustments for some other aged care employees that may be justified on work value grounds.

Should the unions succeed in their push for a further increase within the aged care industry, this will add pressure on other parts of the care sector such as childcare and disability care. We’ll update you of any significant changes that affect you.

You can access updates direct from the Commission at Work value case – Aged care industry.

STAGE 1 IN DETAIL:

15% wage increase for aged care sector – 30^th of June 2023

Minimum wages will increase by 15% for some employees working in aged care which applies to the following awards:

• Aged Care Award
• Social, Community, Home Care and Disability Services Industry (SCHADS) Award
• Nurses Award

Increases take effect from the first full pay period commencing on or after 30 June 2023.

Who the increase applies to

The increase applies to direct care employees working in aged care in the following award classifications:

• Aged Care Award: personal care workers (PCWs) and recreation/lifestyle activities officers;
• Nurses Award: nursing assistants, enrolled nurses, registered nurses, nurse practitioners working in aged care;
• SCHADS Award: home care workers working in aged care.

The 15% increase also applies to the most senior food services employee (levels 4-7):

• covered by the Aged Care Award;
• working at a particular aged care facility or site.

Who the increase doesn’t apply to

The 15% increase doesn’t include other employees in the aged care sector. This includes:

• support and administrative employees;
• chefs and cooks covered by the Aged Care Award who aren’t the most senior food services employee at a particular aged care facility or site.

However, the Commission has announced a further process to consider timing, possible further increases for these workers, and whether to also grant a pay raise for aged care administrative and support staff.

In the meantime, you can check the final determinations for each award to see the new minimum rates:

• Aged Care Award final determination
• SCHADS Award final determination
• Nurses Award final determination.

What does this mean for employers?

Employers within the listed industries should review and update as required their employees’ classification and wages. Employers should:

• Review your employees classifications and pay rates against the new rates, and apply the increases (where applicable) from the start of the employee’s first full pay period commencing on or after 30 June 2023, where applicable;
• Check that each employee is correctly classified under the Award level applicable for the work they perform and is receiving any applicable allowances;
• Any changes to employment details, pay rates or entitlements should be confirmed in writing for each employee. A letter should be issued to all affected employees confirming employees’ revised wages and classifications.

The team at Edwards HR will continue to share any updates as they rollout. If you would like more advice about how these changes will affect your business and assistance with the review and templates, Edwards HR are more than happy to help.