I nearly missed this one myself, and I run payroll for a living. If you employ anyone aged 18-20 in retail, fast food, or a pharmacy, this is one of the bigger Award changes in years, and it is worth getting ahead of now rather than scrambling in November.
Quick answer: The Fair Work Commission has ruled that junior pay rates for 18-20 year olds will be phased out in the Retail, Fast Food, and Pharmacy Awards, starting 1 December 2026 and completing by 2029. Workers with more than 6 months of experience move to the full adult rate first. Restaurant and Hospitality Awards are not currently affected.
What Actually Happened
On 31 March 2026, the Fair Work Commission’s full bench handed down a decision that removes discounted junior pay rates for 18-20 year olds under three modern awards: the General Retail Industry Award, the Fast Food Industry Award, and the Pharmacy Industry Award. The case was brought by the SDA (the union covering retail and fast food workers) after a multi-year campaign arguing that paying a fraction of the adult rate to legal adults doing the same job was no longer justifiable.
Under the old system, an 18-year-old typically earned around 70% of the adult rate, a 19-year-old around 80%, and a 20-year-old around 90%, despite often doing identical work to colleagues aged 21 and over.
Who Is Affected
- Employees aged 18, 19, or 20
- Working under the General Retail Industry Award, Fast Food Industry Award, or Pharmacy Industry Award
- With more than 6 months of experience with their current employer (this threshold determines when the full rate kicks in)
Workers under 18 are not affected and will continue to be paid under the existing junior rate scales. The Restaurant Industry Award and the Hospitality Industry (General) Award are also not currently included in this ruling, though similar applications from other unions in other industries would not be surprising given this outcome.
The Timeline
- 1 December 2026: The phase-in begins for eligible 18-20 year olds with 6+ months of experience
- Progressive increases: Rates step up by roughly 5 percentage points every 6 months from that point
- 20-year-olds are expected to reach full adult pay by around mid-2027
- 18-year-olds are expected to reach full adult pay by around mid-2029
The staged approach was designed specifically to soften the cost impact on businesses that rely heavily on younger casual and part-time staff, rather than applying the full increase overnight.
What This Means for Employers
If you run a retail store, fast food outlet, or pharmacy, this is a genuine payroll planning issue, not just a compliance footnote:
- Audit your current 18-20 year old staff and flag who has already passed, or will soon pass, the 6-month experience threshold
- Budget ahead. Labour costs for younger staff in these industries will rise progressively through to 2029, and this should factor into pricing and staffing decisions now rather than later
- Update payroll systems in time for 1 December 2026, since the Fair Work pay guides and calculation tools themselves are expected to be updated to reflect the change around the same time
- Watch for flow-on effects. If other unions pursue similar cases in industries like hospitality, this pattern could expand further in coming years
What This Means for Workers
If you are 18, 19, or 20 and working in one of the affected industries, this is worth tracking closely. Once the transition begins, your minimum legal rate will increase, potentially significantly, even if your job hasn’t changed. It is worth keeping a note of your own start date with your employer, since the 6-month experience threshold determines when you become eligible for the higher rate.
Check Where You Currently Stand
Since the change phases in gradually and depends on your specific award, age, and tenure, our Award Pay Calculator reflects current rates as of 1 July 2026 and will be updated as the Retail, Fast Food, and Pharmacy transition takes effect. For more on how junior rates work more broadly, see our guide on how junior pay rates work in Australia.
FAQs
When does the junior pay rate phase-out start?
The phase-in begins 1 December 2026 for eligible 18-20 year-olds with more than 6 months’ experience, with rates stepping up by roughly 5 percentage points every 6 months, fully phased in by 2029.
Who is affected by the change?
Employees aged 18, 19 or 20 working under the General Retail Industry Award, Fast Food Industry Award, or Pharmacy Industry Award, with more than 6 months’ experience with their current employer.
Does this affect hospitality or restaurant workers?
Not currently. The Restaurant Industry Award and the Hospitality Industry (General) Award are not included in this ruling, though similar applications in other industries wouldn’t be surprising.
What about workers under 18?
Workers under 18 aren’t affected and will continue to be paid under the existing junior rate scales.
Final Thoughts
This is one of the more significant modern award changes in recent years, specifically because it targets a long-standing structural feature of Australian minimum wage law, junior rates for legal adults, rather than just adjusting a percentage. Whether it expands to other industries over the coming years remains to be seen, but for retail, fast food, and pharmacy employers, the planning window is now open.
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*This article is for general informational purposes only and does not constitute legal or financial advice. Confirm the current implementation timeline and rates with the Fair Work Ombudsman before making payroll decisions.*