News You Might Have Missed: Junior Pay Rates Abolished by the Fair Work Commission

What does it mean and who is impacted?

On March 31, the Fair Work Commission made an announcement that junior pay rates will be abolished for those aged 18 to 20 in the retail, fast food and pharmacy sectors, boosting the wages of over half a million young Aussies!

There have been talks of this for a few years, but the decision comes after an application was made in 2024 to scrap the junior rates by the Shop, Distributive and Allied Employees’ Association with support by the Australian Council of Trade Unions.

Under the new rules, employees aged 18 to 20 working retail, fast food or pharmacy jobs will no longer be paid less than those who are 21 or older.

Why the change?

The change was called for by unions and advocates on a case of ‘fairness’.

According to Australian Unions, 18-year-olds who have the same social and legal responsibilities as other adults deserve the same wage.

For example, it’s an age where you can enlist in the army, get your license, vote etc., and can bear costs such as rent, fuel and groceries.

In many cases, young employees were earning less than their colleagues, even if they had more skills, or knew more about the job.

What’s been the reaction?

 

 

 

 

 

 

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There are mixed feelings about the change.

While the change is highly sought after by young adults in the workforce, a few flags have been raised.

Particularly, the concern that employers will simply hire more experienced workers due to a lack of incentive to hire younger workers. According to Employment Hero, if an 18-year-old with no experience costs the same as a 25-year-old with several years of skills, some employers may simply hire the more experienced candidate.

The Australian Chamber of Commerce and Industry has urged that the federal government keep an eye on the impact on youth employment and make sure that there are parameters in place to support opportunities for young people to enter the workforce.

There is also concern over the stress on small businesses who might already be having a hard time.

However, it’s a sigh of relief for young adults who have been doing it tough.

Plus, those aged under 18 may even find it easier to get a job, as they will still be paid according to junior rates and will be more competitive as a result.

What’s next?

The adult rates are proposed to be phased through the next  four years, ending in July 2029. Under the phasing-in period, 18-year-olds will have to wait four years for the full adult rate; 19-year-olds will get 100 per cent by July 2028; and 20-year-olds will receive their full increase by July 2027.

If you’re about to turn 18, this is defs some good news for you 👏