This Just In: Fair Work Commission Scraps Junior Pay Rates for Young Adults in Australia
A landmark decision will see hundreds of thousands of Aussies get an overdue pay rise.
On Tuesday, a landmark decision was made that will affect hundreds of thousands of Australians. The Fair Work Commission (FWC) has announced that discounted junior pay rates will no longer apply to young Aussies, with workers aged 18 to 20 now entitled to salaries reflective of those received by their older coworkers. This means that starting from December 2026, an estimated half a million employees will be entitled to a pay rise.
Specifically, the ruling dictates that young employees are required to have at least six months of experience to be eligible for the rates, and employees aged 17 and below will still be paid on junior rates. Said discounts are based on the historical precedent that young employees incur training costs to offset their inexperience, and that businesses have historically been incentivised to hire younger employees because they'd have to pay them less.
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Typically, young people in Australia get their start in hospitality, fast food, pharmaceutical and retail industries, and responses within those industries have been mixed. According to the Australian Retail Council (ARC), one in eight Australians gets their first job in retail, and in a statement, ARC Ceo Chris Rodwell said that while the ARC welcomes the FWC's decision, it "does add another layer of cost at a time when many retailers are dealing with a cost-of-doing-business crisis."
The ruling was set in motion in 2024 by an application from the Shop, Distributive and Allied Employees Association (SDA). Following the ruling, SDA National Secretary Gerard Dwyer said, "It may take longer than we would have liked, but the principle has been established that no longer will 18-year-olds be treated as second class citizens," citing that 18-year-old employees are old enough to vote, enlist in the armed forces and to drive, adding the decision was "up there with the introduction of equal pay for women in the 1970s."
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While the added cost for businesses cannot be overlooked, this decision will go a long way to support young Australians struggling to make a start amidst the cost-of-living crisis. It will take some time to go into full effect, though, with the rates set to increase five percent each year until 2029 until they match adult rates. Upon completion, 18-year-olds will be entitled to 70 percent of the adult pay rate, 19-year-olds to 80 percent and 20-year-olds to 90 percent.
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