For dismissals which take effect from 1 July 2025, the high income threshold (which limits an employee’s eligibility to pursue an unfair dismissal claim unless they are award or agreement covered), will increase from $175,000 to $183,100. The maximum compensation available to employees for unfair dismissal claims (for dismissals from 1 July 2025) also increases from $87,500 to $91,550.
It is important for employers to remember, though, that high income earners still have access to other types of dismissal-related claims when challenging their dismissals, including general protections claims, discrimination claims and common law (including breach of contract) claims, and that the available compensation is not generally capped by a maximum available compensation sum in the context of those other types of claims.
Likewise, the high income threshold for contractors challenging unfair deactivations and contractual terms will rise from $175,000 to $183,100 on 1 July 2025.
Increases of 3.5% to the National Minimum Wage and to all award minimum wages, also become effective from the first pay cycle on or after 1 July 2025. The new weekly minimum wage from 1 July 2025 will be $948 a week or $24.95 an hour. Allowances payable to employees under an award will also increase in accordance with award-prescribed formulas, from 1 July 2025. Employers should note that:
- if they are paying an employee above the new minimum rate prescribed by the applicable award, it is not necessary to adjust those rates unless they have agreed otherwise (for example, in an enterprise agreement);
- but that if they have an enterprise agreement containing rates below the increased minimum award rates, they should increase their rates from 1 July 2025 so that they are paying at least the minimum rates in the award (regardless that their enterprise agreement contains rate below the minimum Award rates).
Super contributions will also be subject to a further 0.5% increase from 11.5% on 1 July 2025, to land at their legislated ceiling of 12%.
Also, for babies born on or adopted on or after 1 July 2025 there is an increase to paid parental leave (PPL), with a 24-week entitlement to PPL payments to commence (120 flexible PPL days, increased from 110 days) and in addition, certain recipients of PPL payments will become entitled to receive an associated superannuation contribution.
If you have any concerns or questions, the team at Emplawyer are ready to help.
