The July 2025 Workplace Changes That Could Transform Your Business Costs

Introduction

Australian businesses face mandatory wage and superannuation increases from 1 July 2025, arriving at a time when compliance failures carry criminal penalties.

What Changes on 1 July 2025

Minimum wages increase by 3.5%

The national minimum wage rises from $24.10 to $24.95 per hour, or from $915.80 to $948.10 per week. This 3.5% increase applies across all modern award classifications, affecting base rates, penalty rates, and most allowances.

Superannuation Guarantee reaches 12%

The superannuation guarantee rate increases from 11.5% to 12%, completing the phased increases that began in 2013. Employers must contribute an additional 0.5% of ordinary time earnings.

Why This Year Is Different

Since 1 January 2025, intentional wage underpayments constitute a criminal offence. Penalties include up to 10 years imprisonment and fines up to $7.825 million or three times the underpayment amount, whichever is greater.

This shift from civil to criminal enforcement fundamentally changes the stakes. What might have been an expensive mistake in previous years could now trigger criminal prosecution if patterns suggest intentional conduct.

The Fair Work Ombudsman has enhanced powers to investigate suspected underpayments and can refer matters to the Commonwealth Director of Public Prosecutions. Recent enforcement actions demonstrate their willingness to use these powers.

Beyond the Basic Increases

The 3.5% increase affects more than base wages:

• Casual loading (25%) applies on top of the new rates
• Saturday and Sunday penalty rates increase proportionally
• Overtime rates rise with the base rate
• Most allowances linked to wage rates also increase
• Shift penalties and public holiday rates go up

Many businesses discover they've been calculating these components incorrectly when implementing July changes. With criminal sanctions now possible, ensuring accuracy across all wage elements has become critical.

Common Compliance Traps

Classification errors

Employees on the wrong award classification don't just affect July – they create historical underpayment liabilities. July reviews often uncover these longstanding issues.

Annualised salaries

Fixed annual salaries must still meet minimum award entitlements after increases. Many businesses forget to review whether their set salaries remain compliant.

Incomplete updates

Updating base rates while missing penalties, allowances, or super calculations remains a frequent error that can trigger Fair Work investigations.

The Broader Compliance Landscape

July's changes arrive amid significant workplace law reforms:

Already in force:

• Criminal wage theft penalties (January 2025)
• Queensland sexual harassment prevention plans (March 2025, $9,679 penalty for non-compliance)

Coming soon:

• Right to disconnect for small business (26 August 2025)
• Proposed ban on non-compete clauses for workers under the high-income threshold (2027)

This environment demands systematic compliance approaches rather than last-minute scrambles.

Taking Action

Successful implementation requires immediate attention to:

• Verifying all employee award classifications
• Reviewing which allowances and penalties apply
• Updating payroll systems comprehensively
• Documenting classification decisions
• Communicating changes clearly to employees
• Addressing any historical underpayments discovered

The businesses managing these changes well are those treating compliance as core business infrastructure, not an annual inconvenience.

The Bottom Line

With criminal penalties for wage theft now in force, getting July implementations wrong isn't just expensive – it's potentially criminal. The combination of increased rates, complex calculations, and enhanced enforcement creates significant risk for the unprepared.

Smart businesses are using the July changes as an opportunity to verify their existing compliance, not just update future rates. If you discover issues now, addressing them proactively demonstrates good faith – waiting until after an employee complaint looks very different to regulators.

Need Assistance?

Salbridge Lawyers provides practical employment law guidance for Australian businesses navigating these changes.

Contact us at info@salbridgelawyers.com.au or call 02 9033 0495.

This article provides general information only. Every business situation is unique – seek specific advice for your circumstances. Information current as at 10 June 2025.