Managing a team in Australia means keeping up with changing workplace laws, annual wage increases and evolving employee expectations.
While many business owners review wages when hiring someone new, remuneration should not be treated as a set-and-forget decision. Changes to award rates, minimum wages, employee responsibilities and market conditions can all impact whether your current approach remains appropriate over time.
Regular wage reviews help businesses ensure employees are being paid fairly, remain competitive in the market and maintain alignment with their broader people strategy.
Am I paying my employees correctly?
With an ever-thickening melting pot of innovative roles, titles, industries, and changes in legislation, it can be tricky for employers to know if they are paying their employees compliantly and competitively.
Some wages will be dictated by a Modern Award (there’s 122 of them!), the National Employment Standards, or can even be award-free. But what does this actually mean?
Employee wages should not be viewed as a set-and-forget decision. Annual minimum wage increases, changing award rates, evolving job responsibilities and recruitment market conditions can all impact whether your remuneration approach remains appropriate over time.
Regular wage reviews help businesses ensure employees are being paid fairly and consistently, while also supporting retention, engagement and compliance obligations.
Managing wage compliance and annual reviews
The Fair Work Commission’s Annual Wage Review is one of the most common triggers for businesses to review employee wages.
The Fair Work Commission handed down its annual wage review decision, increasing the minimum wages in all Modern Awards by 4.75% and the National Minimum Wage was also increased by approximately 6% taking it to $26.44 per hour ($1,004.90 per week). These new rates take effect from the first full pay period on or after 1 July 2026.
For many businesses, this is about more than simply updating hourly rates. It’s an opportunity to review employee classifications, pay rates, salaries, allowances, penalty rates and any changes to employee duties or responsibilities that may have occurred over time.
One of the most common issues we come across isn’t businesses intentionally getting it wrong. It’s that classifications, salaries and payroll settings haven’t been reviewed as roles and the business has evolved.
An annual wage review provides an opportunity to step back, assess your current arrangements and ensure your remuneration approach continues to support both your people and your business.
Signs it may be time for a wage review
Not sure whether your employee wages are due for review? Some common indicators include:
- Annual wage increases are taking effect
- Changes to employee duties or responsibilities
- Promotions or internal restructures
- Significant business growth
- Difficulty attracting or retaining employees
- Concerns that current pay rates may no longer reflect the market
If any of these sound familiar, it may be worth taking a closer look at your current remuneration arrangements.
Do you pay some of your employees an annualised wage arrangement (otherwise known as a salary)?
Paying employees an annualised salary can provide simplicity and certainty for both employers and employees. However, these arrangements should still be reviewed periodically to ensure they remain appropriate as roles, hours and responsibilities evolve.
Changes in award terms, rates, employee duties, work patterns or business needs can all affect whether an annualised salary continues to reflect the value of the role and the expectations placed on the employee.
Regular reviews can help identify potential issues early and provide confidence that your remuneration arrangements remain fit for purpose.
What are the risks?
A set-and-forget approach to remuneration can create challenges for businesses over time.
Failing to review wages regularly may result in employees feeling undervalued, particularly if their responsibilities have grown or market rates have shifted significantly. This can impact engagement, productivity and retention, making it harder to attract and retain great people.
At the same time, businesses that don’t periodically review remuneration may risk falling behind changes to award rates, minimum wages and employment conditions.
If an employee’s wage or salary falls below the specific award amount, the business may be liable for backpay and penalties relating to new wage theft laws. Landing in the headlines for underpaying employees can have a significant impact on your reputation and employer brand. The cost of repairing trust often far outweighs the effort involved in conducting regular reviews and making informed remuneration decisions.
So, how can we help?
A wage review often reveals opportunities and risks that may not be immediately obvious.
Many business owners are focused on running and growing their business and simply don’t have the time to stay on top of changing employment obligations, market trends and remuneration expectations.
Others discover that employee responsibilities have evolved significantly since a role was first created, making it worthwhile to reassess whether current pay arrangements still align with the position.
We can help reduce your risk of underpaying (or overpaying) your employees, help you strike the right balance for your bottom line while retaining your most valued team members, and help you attract new employees.
When conducting a review, we will always consider your business goals, people strategy, industry, market and other business specific factors.
What is involved in a wage review?
- We review the current wage information, position details, qualifications and the key responsibilities of your employees.
- We identify what legal instrument governs each employee’s wages and what they should be paid.
- We undertake a comparison of what your employees are currently paid versus what our analysis has found.
- We step you through our findings and recommendations for each employee, helping identify risks and focus areas for your business.
- Where you choose to pursue our recommendations, we will be there to help guide you through employee consultations.
A Wage Review will…
- Outline any risks and subsequent solutions
- Help balance your legal obligations, bottom-line goals and employee retention
- Ensure employees are appropriately compensated
- Help you remain competitive in the market & attract new talent
- Increase awareness of when wages should be reviewed in the future
- Help start a conversation about your people and retention strategy
A wage review can provide clarity, confidence and peace of mind that your remuneration approach is supporting both your people and your business.
Whether you’re navigating annual wage increases, reviewing employee roles individually or simply wanting to understand where you stand, we can help you identify opportunities, manage risk and make informed decisions about your team.
A little time invested now can help avoid bigger headaches down the track.
If you’re not sure where to start, begin with a review of your employee classifications and current pay rates. Want hands-on help? Reach out to us for a wage review tailored to your business
FAQs
How often should employee wages be reviewed?
While many businesses conduct wage reviews annually, there is no one-size-fits-all approach. It’s also worth reviewing employee wages when roles change, responsibilities increase, promotions occur or significant market changes impact remuneration expectations.
Why are regular wage reviews important?
Regular wage reviews help businesses ensure employees are being paid appropriately, remain competitive in the market and keep pace with changes to minimum wages, award rates and business needs. They can also help identify potential risks before they become business critical.
What should be included in a wage review?
A wage review typically considers an employee’s role, responsibilities, qualifications, applicable industrial instruments, current pay arrangements and, where relevant, market remuneration data. The goal is to assess whether current remuneration remains appropriate for both the employee and the business.
Do wage reviews only apply when minimum wages increase?
No. While annual wage increases are a common trigger, businesses should also consider reviewing wages when employee responsibilities change, new positions are created, business growth impacts role scope or market salary expectations shift. It’s particularly important to review all annualised salary arrangements to ensure they do not fall behind the applicable award rates, including penalties, allowances and loading.
