Minimum Wage Increases set for Three Years
20 December 2018
Club administrators need to take heed of the Government’s announcement that the minimum wage will increase by $1.20 per hour (from $16.50) to $17.70 from April 1st 2019 (No, it’s not a joke!). Great news for those employed on minimum wage, bad news for all small business owners and operators.
And if that’s not scary enough we read in the fine print that the same dosage comes out again on 1st April 2020 to make the minimum wage $18.90, and finally on April1 2021 it will reach the Coalition Governments target of $20.00. All good for employees, but how does your business cope.
Attendees at recent conferences will have heard me “preach” that 60% GP on Liquor Sales is your means of surviving these wage increases, anything less and you will struggle. Similarly you need to ratchet up the margins on your food sales.
Let’s look quickly at the impact of $1.20 an hour increase for a worker performing 40 hrs a week in your Club. That is an increase of $48.00 per week gross, or $2496 pa. Now you’ve got three such people on minimum wage so that’s $7488 in additional wage costs. Then everyone else wants a raise too, good luck, your wage bill soon be an additional $10,000 plus p.a. That’s scary enough. BUT it going to happen all over again the very next year, and almost as bad the third year!! Just say an additional $30,000 by 2011/22.
Does that have the potential to create havoc with your budgets or not!!
This is a great piece of news for your lower paid staff, but you’ll all need to plan carefully to cope with the next few years. There’s not going to be an easy fix.
Commentary by Dave Tilley, General Manager, Northern Region.