From 1 July 2025, several key changes to Australia’s workplace laws took effect. These changes impact wages, superannuation, parental leave, and other employee entitlements. For businesses, these reforms bring new legal obligations and compliance risks that must be addressed.
In this guide for employers, our workplace law team, discusses how Australian employers can navigate evolving workplace laws with clarity and confidence. Here’s what your business needs to know to stay compliant and avoid penalties.
Key Takeaways
Minimum wage increase to $24.95/hour or $948/week.
Superannuation contributions now set at 12%.
Paid parental leave extended to 24 weeks (with super to follow in 2026).
High-income threshold increased to $183,100.
Right to disconnect applies to small businesses from August 2025.
What Australian Businesses Must Know
1. National Minimum Wage Increase
Fair Work has increased the national minimum wage by 3.5%, now set at:
$24.95 per hour, or
$948.00 per week (full-time equivalent).
Employers will need to:
Update payroll systems to reflect new minimum and award rates.
Review all employment contracts to ensure compliance with base pay obligations.
Communicate changes to staff, especially award-reliant employees.
Note: The increase applies from the first full pay period on or after 1 July 2025.
2. Superannuation Guarantee Now 12%
From 1 July 2025, the Superannuation Guarantee (SG) rate has officially increased to 12%, completing the phased increases set by earlier reforms.
Action items for employers include:
Adjusting payroll software and employer contribution systems.
Communicating the change to employees.
Reviewing total remuneration packages to ensure SG increases are accounted for appropriately (especially where packages are inclusive of super).
3. Paid Parental Leave Expansion
Eligible employees can now access up to 24 weeks of government-funded Paid Parental Leave for births or adoptions from 1 July 2025.
Plus, looking ahead to July 2026, the government will begin paying superannuation contributions on Paid Parental Leave – so now is a good time to prepare for future adjustments.
How businesses can prepare:
Update internal leave policies and parental leave procedures.
Budget for potential top-ups or super contributions if provided voluntarily.
Support returning parents with clear re-entry plans and flexible work arrangements.
4. High-Income Threshold Increase
The high-income threshold has been increased to $183,100. This affects:
Eligibility for unfair dismissal claims (employees earning above the threshold are generally excluded if not covered by a modern award or enterprise agreement).
The compensation cap for unfair dismissal is now $91,550.
Why it matters:
Employment contracts and termination procedures must be reviewed to account for changes in claim risk.
Businesses must understand how the threshold affects senior staff entitlements and legal exposure.
Understand who is eligible to bring an unfair dismissal claim and how to reduce risk for your business.
5. Small Business: Right to Disconnect (Effective 26 August 2025)
From 26 August 2025, employees at small businesses (fewer than 15 staff) gain the legal right to disconnect – meaning they can refuse work-related communication outside normal hours, unless refusal is unreasonable.
What businesses should do:
Draft and implement a “right to disconnect” policy.
Clearly define expectations around availability, response times, and emergencies.
Train managers to avoid after-hours contact unless absolutely necessary.
Read our comprehensive employer’s guide to the Fair Work Act to better understand your legal obligations.
Compliance Checklist for Employers
To stay compliant and reduce legal risk, businesses should:
- Update employment contracts and pay rates
- Review payroll and super systems
- Communicate changes to employees
- Update internal HR and leave policies
- Train management on new rights and obligations
- Monitor Fair Work updates for any transitional requirements
Find out why employment contracts should be drafted by lawyers – not AI to protect your business legally and commercially.
Is your business ready for the 1 July Fair Work changes? Don’t risk non-compliance. Whether you need to update employment contracts, review HR policies, or understand your obligations under the Fair Work Act – contact us today for a free initial consultation.
Frequently Asked Questions
Do I need to notify employees about the minimum wage increase?
Yes. It’s good practice to formally communicate wage updates to affected employees, particularly those on modern awards or the minimum wage.
Can I absorb the super increase into total remuneration?
It depends. If your employment contracts specify a total remuneration package (inclusive of super), you may not need to increase the employee’s total pay. Always review contract wording carefully.
Review your contracts with our guide to annualised salaries and set-off clauses to ensure legal compliance.
What qualifies as 'unreasonable' refusal under the right to disconnect?
From 26 August 2025, employees at small businesses have the right to ignore work-related calls, messages, or emails outside of work hours – unless their refusal is considered unreasonable.
Whether a refusal is unreasonable depends on:
The nature of the employee’s role (e.g. if they’re on-call or in a critical position)
The urgency of the communication (e.g. is it something that genuinely couldn’t wait?)
Any agreed availability (e.g. if the employee has agreed to be contactable after hours)
Fair Work will provide further guidance before the new law comes into effect. In the meantime, businesses should clearly define expectations in contracts and internal policies.
Do I need to update employment contracts because of these changes?
Not necessarily. If these changes don’t affect your workers, your employment contracts will not likely need updating.
However, if the changes are likely to impact your employees, you should review and update employment contracts to reflect:
The increased minimum wage and superannuation rate
Any changes to parental leave entitlements
Updated termination clauses in light of the new high-income threshold
Keeping contracts current helps ensure legal compliance and protects your business in the event of disputes.
How can small businesses prepare for the right to disconnect laws?
To prepare for the new laws taking effect in August 2025:
Create or update an internal right to disconnect policy
Set clear expectations for after-hours contact in employment contracts
Train managers to respect boundaries and avoid unnecessary out-of-hours communication
Review roles that may require out-of-hours availability and address this in writing
Proactive preparation helps avoid workplace disputes and ensures compliance with the Fair Work Act.
Learn more about the new right to disconnect laws and how they will impact your business from August 2025.
