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On 31 March 2026, the Fair Work Commission issued a decision to abolish junior pay rates in the retail, fast food, and pharmacy industry.
Under the current system, junior employees (an employee under the age of 21 years) are typically paid a percentage of the applicable adult pay rate. These percentages are usually age-based and increase incrementally on each birthday until the employee turns 21 years.
What’s Changing?
The upcoming changes will directly impact employees:
- aged between 18 to 20 years, and
- who are employed under the General Retail Industry Award 2020, Fast Food Industry Award 2020, or Pharmacy Industry Award 2020, and
- who have been employed by their employer for more than six months.
Employees who satisfy these requirements will become entitled to the full adult pay rates for their award classification.
When Do the Changes Take Effect?
The changes will take effect from 1 December 2026.
Rather than take immediate effect, the increases will be phased in over four years, with pay rates rising in 5 percentage point increments every six months.
What Can Employers Do to Prepare?
Moving forward, we recommend that impacted employers take proactive steps to prepare for the changes, including:
- Reviewing your workforce. Identify employees aged between 18 and 20 and assess their length of service.
- Auditing pay rates. Check current pay structures against award requirements to plan for future increases.
- Budgeting for increase costs. Forecast wage increases over the four-year phase-in period so you can plan for any financial impact on your business.
- Updating payroll systems. Ensure payroll software can accommodate the phased increases and automatically adjust pay rates based on age and tenure.
- Training HR teams. Make sure those responsible for rostering, hiring, and payroll understand the new system.
- Communicating with staff. Be transparent with employees about the upcoming changes and how it may impact their pay.
If you have employees under the age of 21 and would like to discuss how these changes affect your business, get in touch with our employment law team today.