Full-time workers on the minimum wage will take home an extra $33 a week as the industrial umpire addresses the cost-of-living sting.
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Financial stress has continued to mount on the nation's lowest-paid workers as cost pressures linger.
But, on Monday, the Fair Work Commission handed down a decision that will lift both minimum wages and awards by 3.75 per cent.
About one in five workers, or 2.6 million people, will be affected by the changes when they kick in on July 1.
"A primary consideration has been the cost-of-living pressures that modern award-reliant employees - particularly those who are low paid and live in low-income households - continue to experience," the commission's president Adam Hatcher said.
"This increase is consistent with the forecast return of inflation to below three per cent in 2025."
In the 12 months to the March 2024 quarter, prices rose slightly more than expected with the Australian Bureau of Statistics revealing that the consumer price index had increased 3.6 per cent.
The commission did not want to increase award wages "by any amount significantly above the inflation rate".
"Labour productivity is no higher than it was four years ago and productivity growth has only recently returned to positive territory," Mr Hatcher said.
The federal government's submission said it would prefer the "real wages of Australia's low-paid workers do not go backwards" and that its tax relief should not be viewed as a replacement to a wage boost.
The commission noted Australians would soon see an increase in their disposable incomes thanks to that tax cut and other cost-of-living relief measures included in the federal budget.
But an increase to the superannuation guarantee amount will moderate those benefits, Mr Hatcher said.
The Fair Work Commission handed out a substantial increase in 2023 - 5.75 per cent for awards and 8.6 per cent for the national minimum - basing its call on a combination of low unemployment, falling wages and high inflation.
The previous decision was also followed by a gender equity research project and Mr Hatcher revealed on Monday that the commission would soon launch proceedings to address gender undervaluation for modern awards and classifications that apply to women-dominated roles.
This includes early childhood education, care workers, social workers, psychologists, dental assistants and other jobs.
Australian Associated Press
