The Fair Work Commission (FWC) has recently abolished junior pay rates for young employees aged 18 to 20 in the retail, fast food and pharmacy sectors beginning from December 2026.

What has changed?

The FWC has determined that adult employees, defined as those aged 18 and over, should ultimately receive adult minimum wage rates. The transition will be staged through to July 2029, with eligibility contingent on six months’ service with the same employer.

Legal rationale

The decision reflects a work value assessment, the evidence indicated that many employees aged 18 to 20 perform substantially the same duties as older colleagues, including supervisory functions. The FWC was not satisfied that age alone justified materially lower remuneration.

Key implications for employers

• Increased labour costs particularly in award reliant sectors with a high proportion of junior employees
• Businesses may reassess staffing models, including hours, role design and seniority mix
• Employers must ensure payroll systems and contracts are updated in line with phased award variations

Implications for employees

• Gradual uplift in earnings for 18–20-year olds
• Reinforcement of the principle that legal adulthood aligns with wage entitlement
• Potential changes to hiring patterns at entry level

While employer groups have raised concerns about cost pressures and employment effects, the FWC’s position is that any negative impact on youth employment is likely to be limited.

If you would like to discuss this or other workplace issues, please contact Andrew Bland or call 02 9412 3077.