Published 24 April 2026
Recent developments from the Fair Work Commission signal a significant shift in how junior employees may be paid across Australia. While still in a provisional stage, the proposed changes are already prompting employers to reassess their workforce planning, payroll systems, and compliance strategies.
What Is Changing?
The Fair Work Commission has indicated that junior rates of pay for employees aged 18 and over may be gradually phased out. The proposal currently applies to key awards in retail, fast food, and pharmacy, with the likelihood of broader application over time.
Under the proposal, eligible employees would receive incremental pay increases every six months until they reach the full adult rate. Importantly, this applies only once an employee has completed six months of continuous service with the same employer.
Why this matters for Employers
Employers with younger workers will need systems that can accurately track:
- Employee age milestones
- Length of service
- Scheduled pay increases over time
Without robust systems in place, the risk of payroll errors and non-compliance increases significantly.
Potential flow-on effects
While the intention is to improve earnings for young workers, there are practical considerations employers should be aware of:
- Employees who change jobs may temporarily lose access to higher pay rates if they have not met the six-month service requirement with a new employer.
- Some employers may reconsider workforce strategies due to rising labour costs, particularly in entry-level roles.
- There may be increased scrutiny around termination decisions where timing coincides with pay increases.
These factors highlight the importance of balancing compliance with fair and ethical people management practices.
Impact on Enterprise Agreements
For organisations operating under enterprise agreements, any changes to junior award rates will need to be considered alongside the agreement’s pay provisions. An employee’s base rate of pay under an enterprise agreement must be at least equal to the base rate they would receive under the modern award that covers them, so employers should review agreement rates when relevant award increases take effect. If the proposed changes are introduced in stages, this may require reviews more frequently than the annual wage update cycle.
Practical steps to take now
While the proposal remains under consideration, employers can begin preparing by:
- Reviewing your workforce demographics, particularly employees under 21
- Assessing whether your payroll systems can handle staged increases and service-based triggers
- Auditing enterprise agreements against potential award changes
- Training managers and HR teams on the implications of these developments
At The BelRose Group, we see these proposals as another example of why employers need to plan ahead as employment law changes. The proposed shift towards greater equity in pay brings operational challenges, so understanding the changes and preparing early will help employers manage compliance and workforce expectations. If you would like support reviewing your current arrangements or preparing your systems for these potential changes, we are here to help.
Contact The BelRose Group
Email: Support@BelRoseGroup.com.au
Phone: 1300 308 707