On 31 March 2026, a Full Bench of the Fair Work Commission handed down a landmark decision to phase out junior pay rates for adult employees in three of Australia's biggest youth-employing awards. Under the decision ([2026] FWCFB 75), workers aged 18, 19 and 20 who have more than 6 months' service with their employer will move, in stages, to the full adult rate for their classification under the General Retail Industry Award, the Fast Food Industry Award and the Pharmacy Industry Award.
The headline "junior pay rates abolished" needs two qualifications an employer should read before doing anything else. The decision does not touch rates for workers under 18. And the timetable is not final: the Commission has expressed a provisional view that the first increase would take effect from the first pay period after 1 December 2026, with full adult rates phased in by mid-2029, but implementation is being heard in August 2026 and no award variations have been made yet. This guide covers what was actually decided, who it covers, the provisional timetable, and the preparation worth doing now.
What the Fair Work Commission decided
The decision arose from an application by the Shop, Distributive and Allied Employees Association (SDA) under section 158 of the Fair Work Act to vary the junior rates provisions of the three awards. It was run as a standalone major case (AM2024/24), heard over eleven days in October and November 2025, and decided by a Full Bench on 31 March 2026.
The Full Bench's conclusion, in its own words: the three awards will be varied "so that junior rates do not apply to young adults other than inexperienced young adults." The measure of experience is the one already used in the General Retail Industry Award for 20-year-olds: whether the employee has been "employed by the employer for more than 6 months." Three boundaries define the decision's reach:
- Ages 18 to 20 only. The Commission expressly declined to alter junior rates for employees under 18, citing among other things child employment restrictions, lower work value associated with maturity and experience, and the risk of pricing young teenagers out of entry-level work. An application to raise the under-18 percentages was refused.
- Experience with the current employer. The 6-month threshold counts service with the present employer only. An 18-year-old with two years at one fast food outlet who changes employers restarts the clock, and can be paid junior rates for their first 6 months in the new job.
- Three awards, defined classifications. The change applies to the classifications where junior rates currently sit: Retail Employee Levels 1 to 3 under the retail award, Pharmacy Assistant Levels 1 and 2 under the pharmacy award, and the junior rate classifications of the fast food award. The Commission did not extend junior rate coverage to higher classifications, and it did not flag a review of junior rates in other modern awards.
The current percentages, and where they are heading
Under the three awards today, an adult-age junior employee is paid a percentage of the adult rate for their classification: 70 per cent at 18, 80 per cent at 19, and 90 per cent at 20. The retail award already pays the full adult rate to 20-year-olds with more than 6 months' service with their employer; the decision generalises that design to 18 and 19-year-olds and to the fast food and pharmacy awards.
Rates for younger workers are unchanged: 45 per cent below age 16 in retail and pharmacy (40 per cent in fast food), 50 per cent at 16, and 60 per cent at 17.
The provisional phasing timetable
The Full Bench proposed introducing the change "gradually over a period of up to four years", in increments of five percentage points at roughly six-month intervals, taking effect from the first pay period after 1 December and 1 July each year. For young Australians aged 18 to 20 with more than 6 months' service, the provisional schedule is:
- 20-year-olds (now 90 per cent): 95 per cent from 1 December 2026, full adult rate from 1 July 2027
- 19-year-olds (now 80 per cent): 85 per cent from 1 December 2026, then 5 points each step to the full adult rate from 1 July 2028
- 18-year-olds (now 70 per cent): 75 per cent from 1 December 2026, then 5 points each step to the full adult rate from 1 July 2029
Treat every date in that list as provisional. The Commission said so itself, and listed the implementation question for further proceedings rather than deciding it.
What has not been decided yet
As at mid-July 2026, no determinations varying the three awards have been made. The Commission held case management conferences in April and May 2026, has directed further evidence and submissions on implementation, timing and transitional arrangements, and has listed a five-day implementation hearing commencing 17 August 2026, with a further mention listed for 28 July 2026. Draft determinations will be published after that hearing, not before.
That sequencing matters for employers in two directions. Nothing is payable yet, and no payroll change should be keyed in against the provisional dates as if they were settled. But the substantive question (whether adult-age junior rates survive in these awards) is decided, and the implementation hearing is about how and when, not whether. Budgeting on the assumption that the first step lands on or near 1 December 2026 is prudent; promising employees a date is premature.
The FWO's position
The Fair Work Ombudsman has published guidance on the junior rates changes confirming the same position: changes could start from 1 December 2026, will be introduced gradually, and further hearings will decide how and when. The FWO has committed to updating that page as determinations issue, which makes it the page to watch.
What the decision means for employer wage costs
For an employer running on these awards, the cost exposure is concentrated, not general. The increase applies only to 18 to 20-year-olds, only once they pass 6 months' service with you, and only in the affected classifications. The full step from 70 to 100 per cent for an experienced 18-year-old is large in relative terms, but it arrives in five-point increments over up to four years (the increments are five percentage points of the adult rate per step, compounding across the phase-in).
The labour cost modelling worth doing now is a headcount and tenure exercise:
- List employees aged 18 to 20 (and those who will enter that band during the phase-in) under the three awards
- Mark each employee's service anniversary with your business, because the more-than-6-months threshold turns tenure tracking into a pay compliance task
- Apply the provisional steps to each affected employee's classification rate and roster pattern
- Re-run the numbers when the determinations issue, because the August hearing may adjust steps or dates
Two second-order effects deserve a line in any plan. Junior rates in these awards are calculated as percentages of adult rates that themselves move with each Annual Wage Review, so the phase-in steps will compound with ordinary July increases. And hiring incentives change at the margins: the 6-month employer-specific threshold means a new 19-year-old hire is initially cheaper than a retained one, which is exactly the kind of incentive that creates churn risk and, handled crudely, general protections risk. Restructuring a workforce specifically to avoid adult rates for young adults is a strategy to get advice on before acting, not after.
If you are not sure your business is paying its junior classifications correctly today, fix that first: a phase-in calculated off a wrong base rate produces confidently wrong pay. That diagnostic is the job of a structured wage and classification audit. For a conversation about what the decision does to your roster economics, call Daniel on 1300 23 44 23.
What employers should do now
Nothing in the decision requires action today, and that is precisely why the well-run businesses will use the window:
- Confirm coverage. Identify which of your employees sit under the three awards and in the affected classifications
- Build the tenure register. Record start dates for all 18 to 20-year-old employees and flag the 6-month anniversaries
- Model the provisional steps into wage budgets from December 2026 through July 2029
- Watch the August 2026 implementation hearing and the FWO's award changes page for the final determinations
- Hold off on contractual or rostering restructures designed around the change until the determinations land and advice has been taken
The decision to abolish junior pay rates for young adults is the largest structural change to youth employment costs in retail, fast food and pharmacies in decades, and it arrives with an unusually long runway. Employers who spend the runway confirming classifications, tracking tenure and modelling the steps will absorb it as a series of small, predictable increases. Employers who first engage with it when the December 2026 pay period arrives will be doing compliance work at the worst time, on top of a base they never verified.
