In March 2026, the Fair Work Commission (FWC) handed down a landmark decision that will phase out junior pay rates for “young adult employees” under the General Retail Industry Award 2020 (Retail Award), Fast Food Industry Award 2020 and Pharmacy Industry Award 2020.
What are the changes?
Currently, employees aged under 21 years who are covered by these modern awards are paid a “junior rate”, being a percentage of the minimum rate payable for their classification. For example, the junior rate for an employee aged 18 years under the Retail Award is 70% of the minimum rate for their classification.
The FWC has decided to vary the junior rates in each of the three modern awards so that employees aged between 18 and 20 years (referred to as “young adult employees”) are paid at a rate of 100% of the full minimum rate of pay for their classification.
These variations will only apply to young adult employees who have been employed by their employer for more than six months.
Junior rates of pay under these modern awards will not change for employees aged under 18 years, and for employees aged between 18 and 20 years who do not have more than six months’ service with their employer.
When will these changes commence?
Further hearings will be held to confirm the timeline and implementation of these variations.
However, the FWC has issued a provisional view that the junior rates of pay should be phased out in increments over a four-year period, with the first variation taking effect from 1 December 2026.
We will keep you updated on further developments in relation to the changes. In the meantime, employers in these industries should review the age and service of its junior employees in preparation for the changes.
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