Junior Pay Rates Scrapped: What It Means for Australian Business

A Defining Shift for Employers

A major shift in workplace regulation is set to reshape payroll across retail, fast food, and pharmacy businesses.

The Fair Work Commission has ruled to abolish junior pay rates for employees aged 18 to 20. This decision impacts hundreds of thousands of workers and signals a clear move toward wage equality across age groups.

For business owners, this is a structural change that directly affects wage costs, workforce planning, and long-term profitability.

What’s Actually Changing

The Core Update

• • Junior pay rates for employees aged 18 to 20 will be phased out
  • Changes apply to:
    • General Retail Industry Award
    • Fast Food Industry Award
    • Pharmacy Industry Award
  • Implementation begins December, with a gradual phase-in over up to four years
  • Employees under 18 remain on junior rates

The Pay Shift in Practice

Previously:

• 18-year-olds earned 70% of adult wages
• 19-year-olds earned 80%
• 20-year-olds earned 90%

Under the new structure:

• Wages will increase incrementally each year
• By 2029, affected employees will receive full adult pay

The Scale of Impact

• Approximately 500,000 workers are expected to benefit
• Businesses with high volumes of young staff will experience the greatest financial impact

What This Means for Your Bottom Line

This is not just a wage increase. It is a fundamental reset of how labour value is assessed.

The Commission’s position is clear:
If two employees perform the same role at the same level, they should be paid equally regardless of age.

For business owners, this introduces three immediate considerations:

Margin Pressure Is Building

Labour-heavy businesses will feel this change quickly.
Rising wage costs without corresponding price adjustments compress margins.