On 31 March 2026, the Fair Work Commission decided to abolish junior pay rates for workers aged 18 to 20 across three major awards – the General Retail Industry Award, the Fast Food Industry Award, and the Pharmacy Industry Award. With an estimated 500,000 workers affected, it’s important to consider the impact on your payroll processes.
The change won’t happen overnight. A phased rollout of the proposed changes begins 1 December 2026 and concludes 1 July 2029, with rate increases triggered at six-monthly intervals. There's also an experience requirement: workers aged 18 to 20 must have six months' tenure with their current employer before they're entitled to the increased rates.
For payroll teams, this creates a sustained compliance challenge, that can’t be solved with a one-off fix. Let’s explore how to update your payroll calculations to handle this complexity and how a system like foundU can help.
Reconfigure award settings
Update employee positions and rates
The first step is to understand which employees are affected and what the correct rates look like at each stage of the transition. Under the previous framework, an 18-year-old earned 70 per cent of the adult rate, a 19-year-old earned 80 per cent, and a 20-year-old earned 90 per cent. The new schedule gradually closes that gap, with full adult rates reached by 1 July 2029 for 18-year-olds.
Once you have mapped the impact, your payroll platform needs to be updated to reflect the new classifications – and old junior positions need to be removed after the six-month tenure is reached so they can't be applied in error going forward.
foundU's award interpretation settings allow you to build a configured library of awards and positions, setting classification rates that align with the award pay guides and defining the rules that apply to each. Draft pay slips are generated as soon as shifts are approved, so you can check award interpretation and compliance before pay runs are processed. The platform also includes an award test tool that lets payroll teams examine how pay rules are being applied.
Reclassifying employees across your workforce needs to happen cleanly, at scale, and without disrupting pay runs. Using a combined employee management and payroll system like foundU, you can link positions with employee profiles, which the award interpretation engine will reference to calculate pay. By updating positions with the new rates, you can automatically calculate the correct pay.
The six-month tenure rule adds another layer of complexity. Using foundU you can schedule employee positions to update six months after commencement. So, once an 18 to 20-year-old crosses the employment threshold with their current employer, the platform can handle the rate change.
However, it’s important to wait for the finalised rates to be announced so that payroll is accurate. Using foundU, you could also set up birthday notifications so that you can run checks when employees are close to transitioning to new rates.
The phased timeline runs across six stages between December 2026 and July 2029. Each one requires rate increases to be applied accurately across every affected employee.
foundU's minimum wage increase tools let payroll teams set the effective date and percentage increase for each stage and automatically roll it out to impacted positions and locations. All rosters, shifts, leave applications, and draft pay slips after the effective date are automatically updated. The platform also allows teams to choose which awards the increases apply to, override rounding where needed, and address above-award rates separately.
After you’ve been able to schedule the increases, you could also use foundU’s labour costing tools to understand the upcoming financial impact on your business.
The Fair Work Commission's decision has a big impact on how junior wages work across retail, fast food, and pharmacy. The preparation period starts now – well ahead of the first-rate changes in December 2026.
To understand the impact of the legislative changes on your business, check out this explainer of the junior pay rate decision straight from the desks of our extended HR and legal advisory team at Citation Group.
If you want to understand how foundU’s connected approach to workforce management and payroll can help you easily manage the three-year compliance transition, then book a demo with our team.