Fair Work to Scrap Junior Rates: What It Means for Young Workers

Australia’s Fair Work Commission is reviewing the long-standing system of junior pay rates and the potential changes could reshape how workers under 21 are paid.

For many young Australians, that’s big news. Whether you’re a student in your first job or an employer managing a youth workforce, understanding how pay differs between age groups and why is essential.

What Are “Junior Rates”?

Under Australia’s national workplace system, anyone under 21 years old is classified as a junior employee. Their pay is typically set as a percentage of the adult rate, based on their age.

This means two people doing the same job can be legally paid different hourly rates — simply because one is younger.

According to the Fair Work Ombudsman, these percentages increase each year until the employee turns 21, when they start receiving the full adult rate.

2025 Hourly Pay Rates: 18 vs 21-Year-Olds

As of 1 July 2025, the national minimum wage for adult employees (aged 21 and over) is A$24.95 per hour (or A$948 per week for full-timers).

Here’s how that compares to younger workers who are not covered by a specific award or agreement (known as award-free employees):

Age Hourly Rate % of Adult Rate

18 years A$17.04/hr ~68.3%

19 years A$20.58/hr ~82.5%

20 years A$24.38/hr ~97.7%

21 years+ A$24.95/hr 100% (adult rate)

This means an 18-year-old could be earning around $8 less per hour than a 21-year-old doing the exact same work, a gap of roughly $300 a week for full-time hours.

Why Fair Work Is Reviewing Junior Rates

Unions such as the Shop, Distributive and Allied Employees’ Association (SDA) have long campaigned for an “Adult Age, Adult Wage” model — arguing that once workers turn 18, they should be paid the full adult rate.

Their case is simple: at 18, workers can vote, sign contracts, and carry adult responsibilities. They believe pay should reflect that.

Employers, however, argue that junior rates help young workers enter the workforce, especially in retail and hospitality, industries that often rely on younger staff.

What Might Change

While Fair Work has not yet made a final decision, there’s growing pressure to phase out junior rates for workers aged 18 and over in certain industries. If that happens, businesses would need to start paying adult wages to all legal adults — regardless of age.

Any changes would likely roll out gradually to help employers adjust, but for young workers, the financial impact could be immediate and significant.

Why It Matters

For an 18-year-old working 25 hours a week, moving from $17.04 to $24.95 per hour would mean an extra $197 a week in take-home pay.

That’s rent, groceries, or even savings toward study — a real difference in the cost-of-living climate.

For employers, it could mean tighter margins or a rethink of staffing models. But it might also help attract and retain young talent in competitive industries.

The discussion around junior rates is part of a broader shift in Australia’s labour landscape, one focused on fairness, equity, and cost-of-living pressures.

As the Fair Work Commission continues its review, both employees and employers should stay informed.

If you’re unsure what rate applies to you (or your staff), check directly with the Fair Work Ombudsman.

Because when it comes to pay, knowledge really is power.