Gerard Dwyer, National Secretary of the Shop, Distributive and Allied Employees’ Association (SDA), has articulated the view that employees aged 18 years and over should be remunerated at the full adult rate of pay. The underlying argument is that individuals legally recognised as adults for civic purposes should receive equivalent recognition within the workplace.
The SDA’s current campaign centres on the proposed abolition of junior wage rates. Under existing award provisions, employees under the age of 21 are paid a reduced percentage of the applicable adult rate. In general terms:
- Employees aged 20 receive 90% of the adult award rate.
- Employees aged 19 receive 80% of the adult award rate.
- Employees aged 18 receive 70% of the adult award rate in industries such as retail, fast food and pharmacy.
There is increasing advocacy from younger workers and union bodies for wage equality, irrespective of age.
The matter has been considered by the Fair Work Commission, which has conducted hearings into the future of junior rates. No formal determination has been released to date.
- Business considerations: Should junior rates be abolished, businesses employing a substantial cohort of staff under 21 years of age may experience a measurable increase in payroll expenses.The requirement to pay all employees the full adult award rate would elevate direct labour costs, potentially impacting pricing strategies, operating margins and cash flow forecasts.
- Planning ahead: Given the uncertainty, it is prudent for business owners to assess potential exposure. Scenario modelling can assist in estimating the financial impact of increased wage obligations and identifying strategies to mitigate pressure on profitability and cash flow.We encourage clients to seek tailored advice to ensure appropriate financial planning and risk management in anticipation of any regulatory change.
