ECEC wages to rise by 5.75% with cost of living jump and gender pay gap key drivers

The Fair Work Commission’s 2023 annual wage review has been completed with the expert panel determining a 5.75 per cent increase in all Modern Award Wages, including those used in the early childhood education and care sector (ECEC).

This year’s decision outcome was primarily driven by cost of living related factors, due to ongoing price rises caused by inflationary pressures, but also efforts to address long standing gender pay gap issues in female dominated sectors such as ECEC. 

“We have also taken into account the recent robustness of the labour market, and the fact that increases to modern award minimum wage rates will provide a disproportionate benefit to female workers and may contribute to narrowing the aggregate gender pay gap across the entire employee workforce,” the Commission noted. 

Moderating factors to increase wages more than 5.75 per cent included the upcoming increase in Superannuation Guarantee contributions rate and the need to avoid entrenching high inflation expectations.

“The level of wage increase we have determined is, we consider, the most that can reasonably be justified in the current economic circumstances,” the Commission concluded. 

5.75 per cent starts on 1 July 2023, builds on last years step change increase

At 5.75 per cent, the increase in Modern Award wages this year is a step higher than last year, which itself was materially higher than previous years. 

The increases will come into effect on 1 July 2023 with those team members on the Children’s Services Award 2010 and Educational Services (Teachers) Award 2010 seeing the 5.75 per increase passed through. 

The increase is expected to see a Certificate III in Children’s Services Level 3.1 educator now earning $26.16 an hour (up from $24.74 last year) and a Diploma in Children Services Level 4.1 educator earning $30.84 an hour (up from $29.17 last year.) 

Level 1 Early Childhood Teachers are expected to see their weekly rates increase to $1,293.85 (up from $1,223.50) after the introduction of the new Award structures. 

Fair Work follows through on new gender pay inequity obligations with review launch 

The Commission confirmed that it will soon commence a research project to identify occupations and industries in which there is gender pay inequity and potential undervaluation of work and qualifications. 

This decision is consistent with the new objectives of the Commission introduced as part of the broad reaching industrial relations reset embodied in the Secure Jobs, Better Pay legislation which was passed into law in December 2022. 

Specifically, the legislation adjusted the Fair Work Commission’s objectives to include the promotion of job security and gender equality when performing functions or exercising its powers under the Fair Work Act (FWA), including the Modern Awards and to establish a Pay Equity Expert Panel and a Care and Community Sector Expert Panel. 

The ECEC sector will be central to the upcoming research projects given its size and historic wage undervaluation with conclusions drawn by the review expected to support future Modern Award decisions as well as equal remuneration and work value cases.

To review the latest FWC decision click here.