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Federal Government Pushes to Protect Penalty Rates

AUSTRALIA, JUL 23 – The bill prevents employers from reducing penalty and overtime rates for 2.6 million workers in key sectors, maintaining a vital wage safety net, according to Employment Minister Amanda Rishworth.

  • In its first sitting week after May 3, Labor, on Thursday, introduced measures in the House of Representatives to amend the Fair Work Act, prohibiting penalty rate absorption into base salaries and marking one of Labor’s first legislative moves after the election.
  • Facing multiple applications before the Fair Work Commission seeking to erode penalty rates for award-reliant staff, the bill responds to a retail employers’ proposal offering some managers a 35 per cent pay rise in exchange for opting out of entitlements.
  • The legislation would enshrine weekend and holiday award rates for about 2.6 million workers, preventing the Fair Work Commission from varying or substituting penalty and overtime rates if it would reduce take-home pay.
  • Following its introduction, the law drew criticism as the Australian Retailers Association called `government overreach`, and Tim Wilson said small firms lacked a voice, despite Coalition support.
  • Just weeks before the August productivity summit, which Innes Willox called `dark irony`, the intervention raises concerns about the Fair Work Commission's independence, and the government is negotiating with the Greens and Coalition to secure Senate passage.
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SmartCompany broke the news in on Wednesday, July 23, 2025.
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