Half a million young Australians are set to receive a pay rise of up to 42 per cent following a watershed decision by the Fair Work Commission to abolish junior pay rates for workers aged 18 to 20.
According to the junior pay rates under the existing framework, an 18‑year‑old can be paid just 70 per cent of the adult wage, with 19‑year‑olds paid 80 per cent and 20‑year‑olds 90 per cent, even when they do the same job.
Numerous young employees in sectors including retail, fast food and pharmacy thus receive remuneration below the standard adult wage. However, the Fair Work Commission has determined that such workers should not receive reduced pay solely on the basis of age, with the reforms scheduled to be implemented progressively over the next four years.
The decision is expected to help around 500,000 workers across Australia, many of whom are employed by large companies in the retail and fast-food sectors.
The reform follows a prelonged advocacy from unions, particularly the Shop, Distributive and Allied Employees’ Association, which argued that young adults face the same living expenses as older employees and therefore should be paid equal compensation for doing the same job.
Supporters of the reform have described it as an important step towards workplace equity. Advocates have argued that youth should be paid adult wages because they can enlist in the armed forces at 17, and are legally permitted to vote, drive, drink alcohol, and smoke from the age of 18.
The revised regulations will apply to employees aged 18 to 20, who have remained with the same employer for a minimum of six months, and will slowly raise their pay to full adult rates. Notably, junior pay rates will continue to apply to workers below the age of 18.
The ruling has attracted criticism. Employer organisations have cautioned that increased wages may make finding jobs harder for young adults.
Despite these concerns, the Fair Work Commission stated that the reforms appropriately balance the interests of both employees and employers.
Government officials such as Treasurer Jim Chalmers supported the ruling, calling it a “great outcome”.The wage reform will be introduced over four years starting in December 2026, with increments of five percentage points at roughly six-month intervals, marking a significant change in the pay of young workers in major sectors.