Junior Pay Rates Changing: What Employers Need to Know

Australian employers in retail, fast food, and pharmacy sectors should prepare for significant wage changes following a recent decision by the Fair Work Commission.

What’s Changing?

The Commission has ruled that junior pay rates for employees aged 18–20 will be phased out, bringing them in line with adult wages over time. These changes apply to:

• General Retail Industry Award

• Fast Food Industry Award

• Pharmacy Industry Award

Previously, junior employees were paid a percentage of the adult rate:

• 18 years: 70%

• 19 years: 80%

• 20 years: 90%

Under the new ruling, wages for these employees will gradually increase to 100% of the adult rate by 2029.

When Do Changes Start?

• First increases begin: December 2026

• Phase-in period: Up to 4 years

This gives businesses time to plan, but early preparation is essential. Please don't hesitate to reach out to our team for advice.

What This Means for Employers

1. Increased Wage Costs

Businesses with a high proportion of 18–20-year-old employees should expect progressive increases in labour costs over the coming years.

2. Payroll & Compliance Updates

Employers must ensure:

• Payroll systems are updated in line with staged increases

• Award interpretation is accurate

• Employment contracts reflect compliant pay rates

Failure to comply could result in underpayment risks and penalties.

3. Workforce Planning Considerations

This change may impact:

• Hiring strategies (especially entry-level roles)

• Rostering and labour allocation

• Cost forecasting and budgeting

Employers may need to reassess how they structure junior and entry-level positions.

4. Retention & Engagement Benefits

While costs will rise, the decision may:

• Improve employee satisfaction and retention

• Reduce turnover in younger staff

• Support fairness and workplace morale

Why the Change?

The Commission determined there is no significant difference in the value of work performed by young adults compared to older employees. The decision aims to improve fairness, while still retaining junior rates for minors under 18 to support workforce entry.

Key Takeaways

• Junior rates for ages 18–20 are being phased out

• Changes begin December 2026

• Full adult pay alignment by 2029

• Employers should review payroll, budgets, and workforce strategy now

Our team at Addition Accounting can help you navigate the changes, update your systems, and avoid costly compliance risks.