The Fair Work Commission has determined that junior pay rates will be removed for employees aged 18 to 20 years under several key modern awards. This change will be most impactful for businesses with a high proportion of 18–20-year-old employees, particularly across the retail, fast food and pharmacy sectors. For many employers, this will change how entry-level roles are structured over time. 

The changes apply to the following awards: 

• General Retail Industry Award  
• Fast Food Industry Award  
• Pharmacy Industry Award  

Under the current system, junior rates apply to employees under the age of 21. These rates are typically set as a percentage of the adult minimum rate, for example: 

• 18-year-olds: 70%  
• 19-year-olds: 80%  
• 20-year-olds: 90%  

The Fair Work Commission has determined that these discounted rates will no longer apply to employees aged 18 to 20. 

Implementation timeline for changes to junior rates

The transition to adult rates will occur gradually, with: 

• A staged phase-in period of up to four years  
• The first increases are scheduled to commence in December 2026 
• Full alignment with adult minimum rates is expected by around 2029  

This approach is intended to provide businesses with time to adjust to the changes. 

Retention of junior rates for minors 

Junior rates will continue to apply to employees under the age of 18. 

In its decision, the Commission noted that younger workers, particularly those balancing school and work, may benefit from junior rates as a mechanism to support entry into the workforce. Employees under 16 were specifically identified as a cohort with increased vulnerability and labour market disadvantage. 

Basis for the Fair Work Commission decision 

In reaching its decision, the Fair Work Commission considered whether there was a meaningful difference in the value of work performed by junior employees compared to adult employees in the same roles. 

The Commission ultimately found that for employees aged 18 to 20, there was insufficient justification to maintain discounted pay rates where the work performed is the same. 

At its core, the decision reflects a broader shift toward fairness, workforce participation and the evolving role of junior rates within the modern award system. 

Estimated impact

Based on available workforce data, it is estimated that approximately 500,000 workers will be affected by the changes. The decision represents a significant shift in the wage-setting framework, particularly for industries that rely on a high proportion of younger workers. 

Retail, fast food and pharmacy sectors have historically utilised junior rates as part of workforce and cost structures, particularly for entry-level roles, with many large employers in these industries playing a role in providing first job opportunities for young people entering the workforce. 

While the changes are phased, employers should expect cumulative cost impacts over time. These impacts may not be immediate but will build over time. This will require businesses to plan ahead. 

Next steps 

Employers covered by the affected awards should: 

• Monitor updates to award rates as the changes are implemented  
• Review payroll systems to ensure compliance with revised minimum rates  
• Consider the impact on workforce planning and labour costs over the transition period  
• Review workforce composition, particularly reliance on 18 to 20-year-old employees in entry-level roles

Further updates and determinations from the Commission are expected as the phase in progresses.

What does this mean for your business?  

This decision does more than increase wages, it reduces the margin for inefficiency in entry-level roles. As labour is no longer discounted, there is greater pressure for each hour worked to deliver clear and consistent value. 

Rather than approaching this purely as a cost increase, businesses should view it as a workforce design question. That means shifting the focus from “how do we afford this?” to “how do we get consistent value from every hour worked?”

How Business Chamber Queensland can support you

For businesses requiring more in-depth support, Business Chamber Queensland offers tailored consulting services to assist with complex workforce, compliance and cost considerations. 

Our Workplace Advisory team can:

• Review award coverage, classifications and employee cohorts impacted
• Audit payroll systems and pay practices to ensure compliance
• Update employment contracts and remuneration structures where required
• Advise on workforce planning, rostering and role design to maintain productivity

Business Chamber Queensland members with HR services included in their membership are invited to contact the Workplace Advisory Services team for tailored support.