Young Australian Workers to Receive Full Adult Pay Under New Ruling

The wage bill for young Australian workers will cost more after the Fair Work Commission (FWC) agreed to remove junior pay rates for workers aged 18 to 20.

In its decision released on March 31, the FWC announced the changes to the General Retail Industry Award, Fast Food Industry Award and Pharmacy Industry Award.

It will impact the retail, fast food and pharmacy sectors, bringing young workers onto full adult wages.

“The Full Bench decided to vary the rates payable to adult junior employees, to set them at a rate of 100 percent of the full adult minimum wage in respect of the relevant classification of each award.

“However, to better achieve the modern awards and minimum wages objectives, the Full Bench decided to retain the current percentage rates for adult junior employees with less than six months’ experience with their current employer,” the ruling said.

Previously, junior rates applied to workers under 21, with 18-year-olds paid 70 percent of the adult rate, 19-year-olds 80 percent, and 20-year-olds 90 percent.

Under the new ruling, those aged 18 to 20 will gradually transition to full pay, with a phase-in period of up to four years. The first wage increases are set to begin in December.

The commission decided not to alter pay settings for younger workers, maintaining existing rates for those under 16.

Australian wages are set yearly the FWC, an independent national body, responsible for minimum wage rates, approving enterprise agreements for larger companies, and handling unfair dismissla cases.

The case was brought by the Shop, Distributive and Allied Employees Association, which also wanted to lift pay for under-16 year olds to 50 percent of the adult wage, and for 17-year-olds to 75 percent.

The FWC rejected these proposals.

Treasurer Jim Chalmers welcomed the outcome.

“We welcome it. The Independent Fair Work Commission decided to get rid of junior pay rates for people over 18 in these industries, but with phase in periods for businesses to adjust,” he told reporters in Parliament.

The Australian Retail Council, which hires 500,000 under-24-year-old workers, has pushed back against the decision warning it will add to mounting costs for businesses.

CEO Chris Rodwell said junior rates have long played an important role in the workforce.

“They recognise that younger workers often have little or no workplace experience and help employers, particularly small businesses, give young people their first opportunity,” Rodwell said in a statement.

“Early work experience is critical, and we cannot afford to make it harder for young Australians to get their first job.”