The Fair Work Commission’s recent decision to increase the minimum and award wages by 3.75% starting 1 July 2024, presents a significant development for small businesses, including the electrotechnology sector.

This increase will set the national minimum wage at $24.10 per hour, equating to $913.91 per week for a full-time, 38-hour work week. Electrical contracting employers will likewise see a 3.75% increase in minimum wage rates across all classifications prescribed by the electrical award.

The change will impact approximately 2.6 million workers, accounting for 20.7% of the national workforce. For small businesses in the electrotechnology sector, the wage increase poses challenges and opportunities.

“While the increase aims to support workers facing cost-of-living pressures, it inevitably adds to the operational costs for small businesses already navigating a tough economic landscape. Small businesses, which often operate on tight margins, will need to strategically manage these increased labour costs,” NECA and Business Solutions Hub workplace relations advisor Naveen Raghavan says.

“It’s crucial for small business owners to assess their financial planning and consider adjustments in pricing, service offerings or cost management strategies to absorb these changes effectively.”

There is also a suite of benefits to this wage increase, as higher wages can lead to improved employee satisfaction and retention which is particularly valuable in sectors like electrotechnology, where skilled labour is essential.

The Fair Work Commission estimates that the increase will have a limited effect on the broader economy, aligning with forecasted wage growth and anticipated inflation rates. Nevertheless, small businesses must remain vigilant and proactive in managing their finances.