- within Employment and HR topic(s)
- with Senior Company Executives, HR and Finance and Tax Executives
- in United States
- with readers working within the Basic Industries, Business & Consumer Services and Consumer Industries industries
After nearly 18 months, the Fair Work Commission has released its decision on junior rates. This decision affects three modern awards:
- General Retail Industry Award 2020
- Fast Food Industry Award 2020
- Pharmacy Industry Award 2020.
As a result, the three Awards will be amended to phase out junior rates for employees aged 18 to 20.
The proceedings in the Fair Work Commission
Currently, the three Awards provide the following junior rates (as a percentage of the adult rate):
- under 16: 40-45%
- 16 years old: 50%
- 17 years old: 60%
- 18 years old: 70%
- 19 years old: 80%
- 20 years old: 90%.
In June 2024, the Shop, Distributive and Allied Employees’ Association (SDA) applied to remove junior rates for all employees aged over 18 and to reduce junior rates for employees under 18 in the three Awards.
The SDA argued that junior rates are no longer justified because the work performed by juniors is substantially the same as work done by employees aged over 21.
Several organisations opposed the SDA’s application, arguing that junior rates have a sound basis and help promote youth participation in the workforce.
The Fair Work Commission’s decision
The Commission considered these submissions and concluded that junior rates for employees aged 18 and over should be phased out over three years.
The Commission accepted that the work value of employees under 18 may be lower due to their maturity and experience. However, it found that employees aged 18 to 20 perform work substantially similar to that of employees over 21, with no productivity difference between the two groups.
The Commission did accept that a reduced rate should apply to employees aged 18 to 20 during the first six months of their role while they are still undergoing training.
On this basis, the Commission decided to phase out junior rates for employees aged 18 to 20 under the three Awards. However, junior rates will remain for employees under 18 and for employees aged 18 to 20 with less than six months’ experience.
The junior rates for employees aged 18 to 20 will be phased out as outlined in the table below:
| Employee age | 18 | 19 | 20 |
| Rate (as a percentage of the adult rate) | 70% | 80% | 90% |
| 1 December 2026 | 75% | 85% | 95% |
| 1 July 2027 | 90% | 90% | Full adult rate |
| 1 December 2027 | 85% | 95% | |
| 1 July 2028 | 90% | Full adult rate | |
| 1 December 2028 | 95% | ||
| 1 July 2029 | Full adult rate |
Key takeaways
While these changes will not take effect until 1 December 2026, employers should start planning for the rate increases. This includes updating payroll systems and forecasting labour costs. Employers should also factor these rate changes into enterprise bargaining and future pay negotiations.
Even employers without staff covered by the three Awards should take note, as applications to amend other awards with junior rates may follow.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]
