New FWC reforms that boost award wages in 5 key sectors

The Fair Work Commission (FWC) has announced landmark reforms set to significantly increase award wages and modernise classifications across five key female-dominated industries.

Let’s delve into the details of these reforms, their implications, and how employers can prepare to remain compliant.

Understanding the reforms

The FWC’s decision follows a comprehensive review of five awards primarily applying to roles historically held by women, such as early childhood educators, pharmacists, and health professionals. The review concluded that these awards undervalued the work performed due to outdated classification models and gender-based assumptions.

Key updates include:

• Significant increases to minimum award rates, aimed at ensuring fairer pay.
• Restructured classification systems, better aligning duties with appropriate pay levels.

Why these changes matter

Historically, pay structures assumed men were primary breadwinners, relegating women’s work to supplementary income. This led to undervaluation of work in sectors like care, education, and health.

Before the 2022 reforms to the Fair Work Act, proving gender-based undervaluation required showing that work in female-dominated roles was less well-paid than comparable work in male-dominated roles. This reliance on a male comparator made it difficult to address undervaluation in sectors like care and education, where there were often not enough male equivalents from which to draw a fair comparison.

Which Awards are affected?

The FWC has prioritised five awards due to their concentration of female workers and continued reliance on award minimums:

• Early Childhood Education
• Pharmacy
• Health Professionals (including psychologists)
• Social, Community, Home Care and Disability Services (SCHADS)
• Aboriginal and Torres Strait Islander Health Services

Summary of wage increases

• Early Childhood Educators: Total increase of 12% over three stages.
• Pharmacists: Total increase of 14.1% over two stages.
• Health Professionals: Total increase of 15% over three stages.
• SCHADS Workers: Total increase of 12% over three stages.
• Aboriginal and Torres Strait Islander Health Workers: Total increase of 11% over two stages.

Details of wage increases

Early Childhood Educators: 

The FWC’s decision will see significant wage increases for these professionals, recognising the skill and responsibility involved in their work. This change is expected to attract more qualified individuals to the profession and improve the quality of early childhood education. Increases are detailed below:

• Stage 1: 5% increase in October 2025
• Stage 2: Further 4% increase in April 2026
• Stage 3: Final 3% increase in October 2026

Pharmacists:

These employees are essential in providing healthcare and medication management and will also benefit from the reforms. The decision includes a confirmed 14.1% pay increase under the Pharmacy Industry Award. This increase acknowledges the complexity and importance of their work. Increases are detailed below:

• Stage 1: 7% increase in November 2025
• Stage 2: Further 7.1% increase in May 2026

Health Professionals: 

Health professionals, including psychologists and other allied health workers, will see changes to their classification structures and wage rates. These adjustments aim to better reflect the expertise and responsibility required in their roles. Increases are detailed below

• Stage 1: 6% increase in December 2025
• Stage 2: Further 5% increase in June 2026
• Stage 3: Final 4% increase in December 2026

Social, Community, Home Care and Disability Services (SCHADS):

Workers in the SCHADS sector provide essential services to some of the most vulnerable populations. Increases are detailed below:

• Stage 1: 5% increase in January 2026
• Stage 2: Further 4% increase in July 2026
• Stage 3: Final 3% increase in January 2027

Aboriginal and Torres Strait Islander Health Workers: 

The reforms also impact Aboriginal and Torres Strait Islander health workers, who play a vital role in delivering culturally appropriate healthcare services. Increases are detailed below:

• Stage 1: 6% increase in February 2026
• Stage 2: Further 5% increase in August 2026

How employers can prepare

For employers directly impacted by these reforms, the changes present an opportunity to review pay practices and ensure that classification structures, contracts, and payroll systems are up to date and aligned with award requirements. Here are some steps employers can take to prepare:

1. Conduct a Financial Impact Review

• Assess how increased wage costs affect your operations.
• Adjust your budget and cash flow forecasting.
• Explore operational efficiencies to offset wage rises.

2. Streamline Operational Processes

• Automate tasks and optimise workflows.
• Cross-train employees to increase flexibility and reduce redundancy.
• Improve scheduling efficiency with digital tools.

3. Review HR Systems and Policies

• Align job descriptions with updated award classifications.
• Update employment contracts and payroll systems.
• Conduct HR audits to ensure ongoing compliance.

4. Communicate Proactively with Staff

• Explain why these changes are happening and what they mean.
• Hold team briefings and Q&A sessions.
• Create a feedback loop to manage concerns and track morale.

5. Monitor Implementation Timelines

• Diarise key dates and plan periodic internal compliance checks.
• Secure executive approvals well in advance of each staged increase.

Key challenges and considerations

The impact of these changes will vary depending on the business. For smaller businesses, like those offering aged care or disability services, the focus will be on managing rising wage costs within existing budgets and funding. For national businesses with enterprise bargaining agreements, substantial wage increases and reclassifications might mean those agreements are no longer aligned with the award.

Employers should also be aware of potential legal risks associated with misclassification or failing to implement the changes correctly. This could result in penalties, breaches of the award, or underpayment claims.

Future implications

The FWC’s decision sets a precedent—expect future reviews and reforms in other female-dominated sectors. Now that gender-based undervaluation can be assessed without a male comparator, broader systemic change is likely.

Key takeaways 

Adapting to the FWC reforms requires a proactive and strategic approach. By conducting a financial analysis, optimizing operational efficiency, reviewing and updating HR practices, communicating effectively with employees, seeking external support and monitoring implementation timelines, affected businesses can navigate these changes successfully.

Consider seeking support from Akyra to assist with compliance, job reclassification and payroll updates as we can provide expert guidance and help you navigate the complexities of the reforms.

Contact us today to book an obligation-free consultation.