The increase falls below the $45 a week rise in the national minimum wage that the ACTU had called for, but above the $8.10 to $10.10 that business groups wanted.

Fair Work Commission president Justice Iain Ross said on Tuesday the national minimum wage will rise by 3.3 per cent to $694.90 a week from July 1.

Business SA slammed the decision, saying it would negate any benefits that South Australian businesses would gain from the cut to penalty rates.

The peak body’s executive director, industry and government engagement,  Anthony Penney, said South Australia’s current CPI of 2 per cent, and the national rate of 2.1 per cent, were significantly below the 3.3 per cent increase awarded by the commission.

“Coupled with significant underemployment, youth unemployment, and the second lowest labour force participation rates in Australia, today’s decision by the Fair Work Commission to increase the minimum wage by 3.3% is a significant disincentive to South Australian employers taking on more staff,” Penney said.

However, the union representing retail workers, the SDA, said the increase didn’t go far enough and would be “eaten away” by cuts to penalty rates.

SDA national secretary Gerard Dwyer said the increase fell short of what was needed.

“Low income workers are already struggling with high rents, electricity and petrol prices,” he said.

“Yesterday they were given the timetable for cutting penalty rates which will cut their take home pay. Today’s increase must be seen in the context of the decision to cut Sunday penalties by 50% by 2020.”

In brief: the new national minimum wage

* $694.90 a week – increase of $22.20

* $18.29 an hour – increase of 59 cents

* 3.3 per cent increase (same for modern award minimum wages)

* 2016 increase: $15.80 a week or 2.4 per cent

WHAT INCREASE DID INTEREST GROUPS WANT?

* ACTU – $45 a week

* Australian Industry Group – $10.10 a week or 1.5 per cent

* Australian Chamber of Commerce and Industry – $8.10 a week or 1.2 per cent

* Australian Retailers Association – $8.10 a week or 1.2 per cent

* Hospitality union United Voice – $87.30 a week

WHO GETS IT?

* Fair Work Commission’s decision directly affects more than 2.3 million employees who are reliant on minimum rates of pay

* Federal government says of the 2.3 million Australians paid an award rate, the majority (70.3 per cent) are not low-paid

* Government says about 196,300 (or 1.9 per cent of all employees) paid national minimum wage rate

* Increase applies from July 1

– with AAP