Changes to junior award rates in Australia

The Fair Work Commission (FWC) has announced significant changes to junior wages under the following awards:

• General Retail Industry Award
• Fast Food Industry Award
• Pharmacy Industry Award

These reforms will gradually phase out junior pay rates for employees between the ages of 18 and 21.

Under the existing framework, employees under the age of 21 are paid a percentage of the applicable award rate. In some instances, 18-year-olds are paid 70 per cent of the award rate, 80 per cent for 19-year-olds and 90 per cent for 20-year-olds. These junior rates are reflective of age-based pay scales, instead of experience or job responsibilities.

This approach has traditionally been justified on the basis that younger employees generally have less experience or skill. However, it has also been criticised for creating unfairness between employees doing the same work.

Changes

The junior rate provisions in these awards will be changed so they apply only to inexperienced young adult employees. As a result, employees aged 18 to 20 will be paid the adult rate for their classification after six months of employment with the same employer.

The Fair Work Commission is consulting on the timing and transitional arrangements for these changes. Its provisional view is that they will be introduced gradually over up to four years, with implementation expected to begin on 1 December 2026. From that date, junior rates are expected to increase by five percent every six months.

Will my business be affected?

At this stage, the abolition of junior rates only applies to employers operating under the General Retail Industry, Fast Food Industry, and Pharmacy Industry Awards.

However, the decision has broader implications. The reasoning adopted by the FWC has created potential for similar challenges in other industries, particularly where employees perform largely identical duties regardless of age and junior rates cannot be clearly justified by differences in skill, training, or productivity.

Whilst no formal applications have been confirmed, industries likely to face similar challenges to junior rates include those who have employees working under the:

• Hospitality Industry Award
• Registered Clubs Award
• Hair and Beauty Industry Award
• Amusement, Events and Recreation Award
• Restaurant Industry Award

These sectors share similar characteristics with affected industries, with large youth workforces performing standardised roles.

Not all awards are likely to be affected. The FWC is expected to distinguish between industries where junior rates can be justified by training arrangements, such as apprenticeships, or where age and experience are genuinely linked to different duties and responsibilities.

Next steps

Employers covered by the affected awards should review their current pay practices and prepare for these changes. If you have any questions or concerns about how these developments may affect your business, please contact us for advice.