If the pay rates under the modern award are higher than the pre-modern award pay rates the increases will be phased in over a period of four years in 20 per cent instalments, starting from the first full pay period on or after 1 July 2010. The new higher pay rates will apply in full from the first full pay period on or after 1 July 2014.
Employers also need to factor in any annual wage reviews increases that Fair Work Australia may make, which will generally take effect from the first full pay period on or after 1 July each year.
Modern awards set out minimum pay rates. Employers can choose to pay more than the minimum rates at any time. If the pay rates in the modern award are higher than those in the pre-modern award, the employer may choose to pay the modern award rates immediately. However, base rates of pay, loadings and penalty rate entitlements are phased separately and care needs to be taken to ensure that the employees are paid their minimum entitlement under each.