Principals urged to review employee contracts in light of annual wage review

Each financial year, an Expert Panel of the Fair Work Commission conducts an Annual Wage Review with a view to setting the national minimum wage and the minimum rates of pay in modern awards for the following financial year. 

On 3 June 2025, the Annual Wage Review Decision was delivered, at which time the Fair Work Commission announced a 3.5% increase to the national minimum wage and minimum award wages, effective 1 July 2025. [1] 

The guaranteed superannuation contribution will also increase from 11.5% to 12% of an employee’s ordinary time earnings.

Real Estate principals are urged to urgently review all contracts of employment to ensure their terms remain valid and compliant. We outline below, the key considerations which principals should have regard to when assessing the currency of employment agreements and remuneration structures.

Real Estate Salespersons and Property Managers

Employers must have regard to the updated minimum rates of pay prescribed by clause 14 of the Real Estate Industry Award 2020 (REI Award) [2] for employed real estate agents (including junior employees, trainees and those on supported wages) to ensure that the increased minimum rates are applied from the first full pay period starting on or after 1 July 2025.

For those employers who already pay their employees above award rates, it is crucial to review each worker’s current rate of pay to ensure that it remains sufficient to absorb the increased rates which will apply from 1 July 2025. 

Commission-only Agents

Principals will be aware that commission-only employment arrangements must be reviewed annually to ensure that the employee has satisfied all minimum requirements to qualify for ongoing employment on a commission-only basis, including having achieved the Minimum Income Threshold Amount (MITA). 

As a direct consequence of the increase to the minimum award wage, the MITA has also now increased proportionately.[3] 

Administrative Staff

Similar minimum wage increases apply for administrative staff employed pursuant to the Clerks – Private Sector Award 2020 (Clerks Award) for both ordinary time earnings and penalty rates. [4]

Additionally, the rates payable in respect of the first aid allowance [5] and meal allowances has increased under the Clerks Award.[6]

Conclusion

Given the significant penalties which may apply if an employer is found to have engaged in underpayment of employee entitlements and/or wage theft, principals are urged to review all employment contracts now, to ensure that their terms remain valid and compliant with the updated award provisions.

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