The Fair Work minimum wage increase 2025 takes effect on 1 July, following
the annual review by the Fair Work Commission. This change brings not
only increased pay obligations but also a need to ensure full modern
award compliance across your workforce.

You might’ve seen headlines like:

“Company back paying $1.2 million in wages after Fair Work Ombudsman
finds underpayments over the last 3 years.”

So, how does this happen and more importantly, how can you avoid it?

1. Annual Salary Underpayments Are Common

Many employers mistakenly assume that paying a fixed salary covers
everything. But under a modern award, you’re still required to track and
pay:

• Penalty rates
• Overtime
• Allowances

These often add up to more than the base salary, resulting in annual salary
underpayments if not reviewed regularly.

2. Modern Award Compliance Is Not Optional

In Australia, most roles fall under one or more modern awards. If you’re
unsure which applies, you’re at risk. The key is:

• Identifying the correct award
• Understanding classifications
• Applying correct pay rates

Need help identifying the correct award? Talk to our team →

3. Understand Award Conditions – Not Just Wages

Understanding your obligations under each award is crucial. You must
review:

• Minimum hourly and weekly pay rates
• Penalty and overtime rates
• Allowances (like travel or uniform)
• Required rest and meal breaks
• Maximum ordinary hours of work

Failing to follow these can lead to payroll compliance issues. Learn how
LMHR can help you stay compliant.

Browse our HR Compliance Services →

4. Fair Work July Changes Require Immediate Action

With the Fair Work July changes approaching fast, it’s critical that
businesses:

• Review employee classifications
• Recalculate salaries and entitlements
• Update employment contracts if needed
• Conduct internal audits

We offer Fair Work audit support to help you avoid penalties and ensure
accuracy. Contact us today →

5. Industry Practices Aren’t a Defence

Even if underpayments are common in your industry, it won’t hold up
during a Fair Work inspection. You need to be able to prove your practices
meet legal obligations—not just standard practices.

Treat Compliance as a Strategic Risk

As a business owner, you make data-driven decisions every day. HR
compliance consulting is no different—it’s a form of risk management. Stay
informed, take action, and protect your business.

Need Help with Compliance?

At LMHR Consulting, we provide expert minimum wage advice for
employers across industries and awards. Don’t wait until the Fair Work
Commission comes knocking—get compliant now.

Get in touch with LMHR Consulting to ensure your business is compliant
before the July 1 changes.

Check the current Fair Work pay guides here:

Fair Work Pay Guides – A to Z Awards