Penalty rates are fair compensation for working outside ordinary hours. They recognise that you’re working when most others in the community are not and they make up a significant part of the take home pay for many SDA members who rely on them.
On 28 August 2025, the Fair Work Act was updated to include new provisions that protect penalty and overtime rates of workers across Australia. The legislation was introduced by Workplace Relations Minister Amanda Rishworth and supported by the Federal Labor Government.
Now, penalty rates cannot be legally reduced in Modern Awards if it would result in workers take home pay being reduced.
A Modern Award sets out minimum pay rates and workplace conditions for a specific industry, like the General Retail Industry Award for retail workers.
Since any Enterprise Agreement must contain above-award entitlements, the new legislation also secures penalty rates in all future Agreements.
The new law also ensures that Awards don’t contain conditions that replace penalty or overtime rates for other benefits if it means a reduction in pay for employees.
The SDA has always supported the protections of workers’ penalty rates – that’s why a of group SDA members went to Canberra in July to meet Prime Minister Albanese and Minister Amanda Rishworth. Workers shared their stories and demonstrated why penalty rates matter.
SDA National Secretary Gerard Dwyer said “the Albanese government is to be congratulated and demonstrates how important penalty rates are for employees working unsociable hours as the rest of us enjoy time with our families.
“This legislation will guarantee low paid workers are better placed to put food on the table and a roof over their heads.
“Wage theft remains a significant problem in retail and fast food. This legislation will make it harder for employers to dodge their legal responsibilities and show their hard-working staff the respect they deserve.”
Why we must continue to protect penalty rates.
This year, the Australian Retailers Association and other big business lobby groups filed a case to the Fair Work Commission seeking to have penalty rates scrapped for some salaried workers in the retail sector.
SDA modelling found that a typical retail worker working afternoon and evening shifts every second weekend would be more than $5,000 ($5175.88) worse off under the business lobby groups’ proposal.
The SDA understands how important penalty rates are to our members’ livelihood – that’s why we pushed back against the Australian Retail Association attack on the Retail Award this year.
Although the case in the Fair Work Commission does not have a decision yet, it will now have to consider that penalty rates are protected in law.
Your SDA union membership helps us to protect the workplace entitlements of millions of Australians in retail, fast food and warehousing.