Fair Work Commission abolishes junior pay rates for young adult employees
March 31 2026
ABC News
Companies that rely on young staff have been fighting to keep paying 18 to 20-year-olds less money.
Young adults working in retail, fast food and pharmacies are set to receive a pay rise, after a decision by the Fair Work Commission described as "up there with the introduction of equal pay for women in the 1970s".
The commission moved to abolish junior pay rates for young adult employees while maintaining them for minors, but the staged changes won't come into effect until December.
Hearing from more than 80 witnesses across the three industries, it determined that employees aged 18 to 20 should no longer be subject to "discounted" junior rates.
Terri Butler, deputy president of the Fair Work Commission, said in making the decision, it considered whether there was any difference in the value of work performed by junior employees and other employees in the same classifications under the same awards.
"We have been particularly interested in the extent to which junior rates serve or do not serve the interests of children and young people," she said.
"Young teenagers who are trying to get their first job usually wanting to balance work with secondary education, can benefit from being able to accept discount rates compared with older people doing the same job."
A woman in a black suit.
Terri Butler is the deputy president of the Fair Work Commission.
It decided not to vary the rates for employees who are still minors under 16.
"They are in a position of particular vulnerability and greater labour market disadvantage," Ms Butler said.
"We consider that, among the other matters we've taken into account, there are strong fairness reasons for allowing them to continue to accept discount rates, to get their start in the workplace, gaining valuable experience."
Under the changes, it is estimated around half a million workers will be eligible for the pay rise, according to ABS data.
The ruling addresses an application to vary junior rates under the General Retail Industry Award, the Fast Food Industry Award, and the Pharmacy Industry Award.
There will be a phase-in period of up to four years and the first wage adjustments are scheduled to begin in December.
'Landmark decision'
"Junior pay rates" applied to people below the age of 21, meaning 18-year-olds were paid 70 per cent of the award rate, 80 per cent for 19-year-olds and 90 per cent for 20-year-olds.
Under the commission's ruling, the rate for 18-year-olds will increase by 5 per cent each year until 2029, bringing it in line with an adult wage.
Larger businesses previously claimed the case would have a "totemic" impact to the structure of employment.
Big employers like McDonald's and Coles are often stepping stones to full-time employment, with Woolworths alone providing about one in eight Australians with their first job.
The back of a young man's head, as he stands in a Woolworths supermarket carpark.
Woolworths alone provides about one in eight Australians with their first job.
Advocates have argued youth should be paid adult ages because you can enlist in armed forces at 17, and can vote, drive, drink alcohol and smoke from 18.
National Secretary for the Shop, Distributive and Allied Employees Association (SDA) Gerard Dwyer said it was a "landmark decision, up there with the introduction of equal pay for women in the 1970s".
"It may take longer than we would have liked, but the principle has been established that no longer will 18-year-olds be treated as second class citizens," he said.
"Their work is as valuable as anyone else's and before too long they will be paid accordingly."
The National Union of Students said when students were underpaid it directly impacted their ability to succeed at university.
"This is a real win for young people. Ending junior rates means fairer pay for the work they're already doing and takes some pressure off students balancing work and study," National president Felix Hughes said.
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