Fair Work Commission moves to end Junior Rates for 18+

In a landmark decision handed down on 31 March 2026, the Fair Work Commission (FWC) has reshaped how junior rates operate under three key modern awards. For decades, those under the age of 21 in the retail, fast food and pharmacy industries, have been paid a discounted percentage of the relevant adult rate. The FWC decision has significantly altered the status quo with changes being phased in from 1 December 2026.

In June 2024, the Shop, Distributive and Allied Employees’ Association (SDA) applied to vary junior rates in three modern awards:

• General Retail Industry Award 2020
• Fast Food Industry Award 2020
• Pharmacy Industry Award 2020

The SDA argued that the payment of reduced junior rates to employees aged 18 to 20 was not fair or appropriate as young adults routinely perform the same duties, carry the same responsibilities and work under the same conditions as older employees and consequently, should be paid the same.

The union accepted that some form of discount might still be justified for minors and truly inexperienced workers but contended that age alone was a poor representation for skill, productivity or work value once an employee reached adulthood.

Employer groups opposed the application, arguing that junior rates helped support youth employment, reduced training risk, and provided incentives for businesses to hire younger workers.

Historically, awards assumed that younger workers were less productive, required greater supervision, and had fewer financial obligations. Junior rates were therefore set as stepped percentages of the adult rate, usually increasing each year until age 21. When modern awards were created in 2010 under the Fair Work Act, most junior wage structures were carried over largely unchanged from the previous state and federal awards. However, there has been a growing criticism of junior rates in recent years.

The FWC found that junior rates for adults (defined as workers aged 18 to 20) could no longer be justified simply on the basis of age. The evidence showed that in the relevant industries, young adults often perform work of equal value to older employees in the same classifications.

The Commission emphasised that modern awards must reflect contemporary standards and community expectations.

The Bench did draw a distinction between those who are aged 18-20, and those under the age of 18 who are genuinely inexperienced. The outcome of the decision is that:

• Employees aged 18 to 20 are to be paid 100% of the adult rate once they have six months of service with their employer,
• Existing junior percentages will continue to apply to:
  • employees under 18, and
  • employees aged 18 to 20 with less than six months’ service.
• The six months of service is a time-based test for all employees, the FWC has not made any additional considerations for casual or part-time employees.
• The changes will be phased in gradually, with increases taking effect from December 2026 with full alignment occurring by July 2029 as set out below:

Employers should start preparing for these changes in advance of December, including starting to consider how many employees aged 18 to 20 will reach the six‑month experience threshold during the transition period and factor the staged increases into labour budgets. Businesses will also need to consider updating payroll systems as well as reviewing contracts, onboarding processes and record‑keeping practices to ensure experience is accurately tracked and pay adjustments occur at the correct time.

This decision marks a significant shift in modern award standards and how they are changing to adapt to community expectations. Whilst at this stage, the FWC decision only marks a shift in junior rates for three awards, it sets a strong precedent and employers in other industries should be on alert as similar applications are likely to be made in other awards. This would appear to be a particularly high risk in industries such as hospitality, tourism, amusement and events which employ significant numbers of junior employees.

If you have questions or concerns around implementing these award changes, please contact us below and one of team will be in touch within 24 hours.