Fair Work junior pay rates: What the FWC ruling means for employers and workers

Introduction

The recent Fair Work Commission (FWC) decision to abolish junior pay rates for employees aged 18 to 20 is a significant change for the Australian labour market. The move affects around 500,000 young adults working in retail, fast food and pharmacy, and has immediate relevance for employers, employees and payroll teams. Understanding fair work junior pay rates and how awards operate is essential to ensure lawful pay and budgeting.

Main details

What the FWC changed

The Fair Work Commission has moved to phase out previously lower junior pay rates for workers aged 18–20, effectively abolishing reduced rates for that age group. This change covers large sections of hospitality and retail sectors and will influence wage costs and pay calculations across affected businesses.

How junior pay rates are calculated under awards

The Fair Work Ombudsman explains that junior pay rates have typically been expressed as a percentage of the relevant adult pay rate under modern awards. Employers and employees must check the specific award, enterprise agreement or other registered agreement that applies, because some instruments can vary the approach. The Ombudsman also references supported employment services award pay rates among the instruments that set minimum pay requirements.

Special rules and tools

Certain awards impose special requirements: where juniors sell or serve alcohol under two common industry awards, those workers must be paid the adult rate for their classification regardless of age. To assist businesses and workers, the Fair Work Ombudsman offers a Pay and Conditions Tool to calculate minimum junior pay rates under the relevant award.

Impact on SMEs and payroll

Small and medium enterprises are likely to face higher wage bills as a result of the change. Employers in retail, fast food and pharmacy should review payroll settings, enterprise agreements and rostering plans to assess the financial impact and ensure compliance.

Conclusion

The abolition of junior pay rates for 18–20 year‑olds is a notable policy shift with practical consequences for roughly 500,000 workers and their employers. Businesses should review applicable awards and agreements, use the Fair Work Ombudsman’s Pay and Conditions Tool, and update budgets and payroll processes. Employees should check their classification and pay to confirm they receive the correct adult rates where applicable, including special cases such as work involving the sale or service of alcohol.