The Fair Work Commission (FWC) has announced that 18–20-year-old workers in retail, fast food and pharmacy must be paid adult wages.

Until now, those aged 20 have been paid 90% of the award rate, 19-year-olds 80%, and 18-year-olds 70%.

The new changes – which will be phased in over time starting from 1 December 2026 – will only apply once an employee has gained six months’ experience with the same employer. 

Retail responds

The Australian Retail Council (ARC) says the FWC’s decision will add significant costs to retail businesses, particularly small and medium-sized operators already under pressure from a sustained cost-of-doing-business crisis. 

ARC CEO Chris Rodwell says while this will be a financial blow for businesses, the decision recognises the need to maintain pathways into work and the realities facing businesses operating in a challenging economic environment. 

“Junior rates have served Australia well for generations. They recognise that younger workers often have little or no workplace experience and help employers, particularly small businesses, give young people their first opportunity,” he says. 

The ARC welcomes the Commission’s decision to retain existing junior rates for 16 and 17-year-olds, which it says is critical to protecting employment opportunities for young people entering the workforce.  

“Crucially, junior rates for workers aged 17 and under will remain in place. That’s important. Early work experience is critical, and we can’t afford to make it harder for young Australians to get their first job,” says Mr Rodwell.  

“The move to 100% adult rates is linked to experience with the same employer, and the long transition period gives businesses time to adjust. That’s a practical approach that reflects current trading conditions.”

Small business concerns

Citing an ARC focus group, the organisation says small retail businesses have expressed strong concerns that removing junior rates will increase labour costs and make it harder to employ young people entering the workforce, while some small retailers said they could struggle to remain viable as a result of such a decision (source: ARC Redbridge Small Business Focus Group, November 2025). 

Mr Rodwell says retail has long been the training ground for Australia’s future workforce.

“Small retailers told us clearly that junior rates help them take a chance on young people who may not yet have experience,” he says.  

“Many retailers already pay above-award rates to retain skilled young employees as they gain experience and take on more responsibility. Junior pay structures have long provided a balanced pathway that supports both youth employment and business viability.” 

Tough conditions

Mr Rodwell says retail businesses are now operating in significantly tougher conditions with rising rents, insurance, supply chain costs, regulatory complexity, and the escalation in global fuel prices is adding further pressure at pace. 

“The reality is, this decision does add another layer of cost at a time when many retailers are dealing with a cost-of-doing-business crisis,” he says. 

The decision also comes as businesses await the outcome of the FWC’s upcoming Annual Wage Review. 

“When wage costs rise faster than productivity in this environment, it compounds the pressure on hiring, investment and ultimately prices,” says Mr Rodwell.