Young workers in Australia, specifically those aged between 18 and 20 and employed in retail, fast food, and pharmacy sectors, are set to receive full adult wages instead of the previously reduced junior rates.

The Fair Work Commission has chosen not to alter the pay structure for employees under the age of 16.

Junior pay rates have historically allowed younger employees, typically under 21, to earn a percentage of the full adult wage, with their earnings increasing as they age.

Under the existing arrangement, 18-year-olds receive 70 percent of the adult wage, which increases to 80 percent at age 19 and 90 percent by age 20. This system will soon be discontinued.

This change comes after the Shop, Distributive and Allied Employees Association (SDA) presented their case to the commission, leading to a decisive ruling on Tuesday.

Gerard Dwyer, the national secretary of the SDA, hailed the decision as a “landmark,” comparing its significance to the introduction of equal pay for women in the 1970s.

‘It may have taken longer than we would have liked, but the principle has been established that no longer will 18-year-olds be treated as second-class citizens,’ he told ABC News.

‘Their work is as valuable as anyone else’s and before too long they will be paid accordingly.’

The Fair Work Commission has ruled workers aged 18 to 20 in retail, fast food and pharmacy will be paid full adult wages instead of discounted junior rates (stock image)

According to the panel’s decision, the commission’s provisional view for timing and implementation was that the first variation would take effect from December 1.

The decision has been welcomed by the Albanese government.

‘This decision recognises that there was an unfairness when it came to younger workers who are over 18 in those sectors, while also ensuring a practical transition for employers as the new arrangements are introduced,’ Treasurer Jim Chalmers said.

‘Ultimately, this is about making sure Australians receive fair and decent wages, and the outcome announced by the Fair Work Commission will help achieve that.

‘I also want to thank the SDA union for the campaign they’ve run on this important issue, and for securing this significant win for young Australian workers.

‘Gerard Dwyer and his colleagues do a wonderful job representing younger workers in these industries, and today’s decision shows the results of their hard work.’

According to the panel’s decision, the commission’s provisional view for timing and implementation was that the first variation would take effect on December 1.

The full variation would then be phased in for all workers between 18 and 20-years-old by July 1, 2029.

There would be no change to the junior rates for people aged under 18, or for those aged 18 to 20 who do not have more than six months’ experience.

The Fair Work Commission’s ruling has been welcomed by Treasurer Jim Chalmers

The latter would be assessed by reference only to the period of employment with the current employer.

The commission’s decision was also praised by the Australia Institute’s senior economist Jack Thrower.

‘Under junior rates, adults aged 18 to 20 can vote, drink, smoke, serve on a jury and fight in wars, yet they were paid less than other Australians for the same work,’ he said.

‘Young people get no discount on rent, groceries or petrol. But their wages are discounted purely due to their age.

‘The Fair Work Commission ruling abolishes these unfair rates for major employers of young adults, including retailers and fast food chains. 

‘This will ensure fairer pay amid rising living costs.’