Adult Age, Adult Wage was the catchphrase behind the Union push to convince the Fair Work Commission to significantly alter the junior pay rates within Awards.

The focus on the campaign was partly due to the cost of living pressures, but in essence it was a recognition that as 18 year olds in every other facet of their lives they are treated as adults and are required to purchase and pay for every-day items as adults – their wage it was argued should reflect this.

Currently 18 year olds receive 70%, 19 year olds receive 80% and 20 year olds receive 90% of the applicable adult minimum wage.

18-20 year old workers to receive full adult wage

Employer Associations countered this by arguing that businesses employing junior workers (under the age of 21) are predominantly in the general retail, pharmacy, and fast-food industries, and that these junior workers use this work to gain the experience necessary to launch their future career paths. Increasing pay to junior workers would also immediately increase consumer costs.

They also raised the concern that this outcome will likely increase youth unemployment (already at 10%). The Australian Chamber of Commerce commenting – “why would you employ an 18-year old with no experience for the same wage as a 24-year-old with experience”?

The Fair Work Commission decision has determined that the junior rate percentages for 18-20 year olds should be removed and the full adult wage apply for 18+ year olds.

To ease this cost impact on businesses they have determined a phased introduction from 1 December 2026 with junior rate percentages increasing over the next four(4) years eventually resulting in all workers at the age of 18 receiving the full adult wage by 1 July 2029.

The decision currently only impacts those businesses with workers employed under the General Retail, Pharmacy and Fast-Food Industry Awards. The expectation is that other Awards will also have junior rates for 18-20 years olds removed in the future. Hospitality, manufacturing and other industries with junior rates advised to keep close watch on future Fair Work decisions.

How can business owners prepare:

• If you employ staff under the General Retail Industry Award 2020, Pharmacy Industry Award 2020, or the Fast-Food Industry Award 2020 – you will be impacted from 1 December 2026.
• This decision does not yet apply to other Awards.
• Audit your payroll for employees under the age of 21 to determine who will be immediately impacted.
• Junior rates will remain for 17 year olds and under, but also consider 17 year olds turning 18 prior to or slightly after 1 December 2026.
• The changes will apply to current junior employees with greater than six(6) months experience from 1 December 2026.
• Consider recruitment decisions of junior workers over the coming months.
• The junior rate changes are phased over 4 years, with full adult pay being implemented for 18-20 year olds by 1 July 2029.
• The Awards and pay tools on the Fair Work Website will be amended by 1 December 2026.

Impact on Age Groups:

• Under 18s: No change. They will continue to receive junior rates.
• 18-20 year olds: Rates will increase by 5 percentage points every six months until they reach 100% of the adult wage.
• 20-year-olds: Expected to reach full adult pay by mid-2027.
• 19-year-olds: Expected to reach full adult pay by mid-2028.
• 18-year-olds: Expected to reach full adult pay by mid-2029.

Your payroll people should be reviewing the impacts now.

The penalties for breaches of Awards and the Fair Work Act are significant and wages theft laws (particularly for deliberate and dishonest underpayments) not only impose significant fines – up to $8.25 million but includes potential imprisonment.

As always, it is advised to consider your employment contracts, payroll systems and wage reviews when a Fair Work decision is made.

Should you have questions, or would like a review of your current employment contracts and/or your payroll system, please contact Wendy Jeffery-Lonnie – HR Director GPHR wendy@gphr.com.au