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New Compensation Cap of $83,750 Takes Effect: What You Need to Know

Introduction: As of Saturday, June 26, 2023, significant changes have been implemented regarding income and compensation caps for unfair dismissal claims, along with adjustments to filing fees for various applications. These updates aim to ensure fair practices and provide clarity within the workplace. In this article, we will delve into the details of these changes and their implications for both employers and employees.

Income Thresholds and Maximum Compensation: Starting from July 1, 2023, the high-income threshold for unfair dismissal applications has increased from $162,000 to $167,500. Moreover, the maximum compensation for post-July 1 dismissal claims has risen from $81,000 to $83,750. It’s important to note that employees who are not covered by an award or agreement and earn above the prescribed amount in Regulation 2.13 of the Fair Work Regulations 2009 are excluded from making an unfair dismissal claim, as stated in Act’s s382(b)(iii).

Filing Fees Adjustment: In addition to the changes in income thresholds, filing fees for specific applications have also been adjusted. For unfair dismissal, general protections, and anti-bullying/sexual harassment applications made under sections 365, 372, 394, 773, 789FC, and 527J of the Fair Work Act, the filing fee has increased from $77.80 to $83.30. However, it’s worth noting that there is no fee for sexual harassment dispute applications made under s527F.

Implications for Employers and Employees: These adjustments to compensation caps and filing fees have implications for both employers and employees. Employers should be aware of the new income thresholds when considering dismissals and ensure compliance with the regulations to avoid potential unfair dismissal claims. On the other hand, employees should be informed about the changes to the maximum compensation limit and the filing fees, empowering them to make informed decisions regarding their rights and potential claims.

Increase in National Minimum Wage and Award Rates: Alongside the changes in compensation caps, there has been an effective 8.6% increase in the national minimum wage (NMW) and a 5.75% boost to all award rates. The new weekly minimum wage has been set at $882.80, equivalent to an hourly rate of $23.23. This increase aims to address economic factors and improve the livelihoods of workers across various industries.

With the recent changes to compensation caps, income thresholds, and filing fees, it is essential for both employers and employees to stay informed about their rights and obligations within the employment landscape. Employers should ensure compliance with the new income thresholds to avoid potential unfair dismissal claims, while employees should be aware of their rights and the maximum compensation available. Furthermore, the increase in the national minimum wage and award rates signifies progress towards fair remuneration for workers. By understanding and adapting to these changes, employers and employees can foster a harmonious and compliant work environment.

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