"Fair Work Australia needs to take a cautious approach this year in adjusting minimum wages. The Australian economy is emerging from the global financial crisis in better shape than most other advanced economies but slowed in the second half of 2010 and has been adversely affected by the severe weather events in the early part of this year," Ai Group Chief Executive, Heather Ridout, said.

"Further, there is a sharp divergence in performance across regions and sectors and global uncertainty around the unfolding events in Japan and the Middle East.

"In Ai Group's Wage Review submission which will be lodged late today with Fair Work Australia, we will propose:

* Firstly, that the Federal Minimum Wage be increased by $14.00 operative from 1 July 2011, with the same increase applied to award minimum wages.

* Secondly, that the exceptional circumstances provisions of the FW Act (s.286(2)) should be invoked for employers who have been badly affected by the recent natural disasters. For these employers, Ai Group proposes an operative date of 1 January 2012 for the $14.00 increase," Mrs Ridout said.