Penalty Rates Under Threat? Not Anymore – If This Bill Passes.

This week, the Federal Government introduced new legislation aimed at protecting penalty and overtime rates for over 2.6 million Australian workers.
The proposed Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill would ensure that workers in hospitality, retail, aged care, and similar industries are legally protected from having their penalty rates bargained away, even through enterprise agreements.

If passed, it will:
✅ Enshrine penalty rates for weekends, public holidays, early mornings, and late nights
✅ Prevent agreements that reduce overall take-home pay by substituting or removing penalty entitlements
✅ Reinforce the importance of the modern award safety net for Australia’s lowest-paid workers

This follows a controversial proposal from the Australian Retailers Association that would allow workers to opt out of penalty rates in exchange for a 35% pay rise — a deal that’s still under review by the Fair Work Commission.

At Track HR Consultancy, we see firsthand how critical penalty rates are for many employees often making up 30-40% of their income. These entitlements aren’t just a bonus they’re the difference between scraping by and staying afloat.

⚖️ For employers, this is another reminder of how fast the industrial relations landscape is shifting and why staying on top of compliance matters more than ever.

Need help reviewing your award coverage or enterprise agreements? Track HR has your back.

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