Every year, 1 July brings a suite of employment law updates, but 2026 represents a particularly broad range of changes. Following the Fair Work Commission’s (“FWC”) annual wage review, many Australian employees will see pay increases, alongside a range of broader legislative reforms.

Here is a practical overview of what is changing and what it means for employers.

National minimum wage and award wage increases

The headline outcome from the annual wage review is a 6% increase to the National Minimum Wage (“NMW”), raising the hourly rate from $24.95 to $26.44.

Minimum rates under modern awards will also increase by 4.75%. Given a large portion of the workforce is covered by awards, this change has wide-reaching implications.

Employers should not assume they are compliant simply because employees are currently paid above award rates. Wage increases may reduce or eliminate existing buffers, making it important to review remuneration arrangements.

Particular attention is required for employees on a C13 or C14 classification under a modern award, as these classifications are being phased out. Additional increases apply to these classifications and must be factored into pay adjustments.

The new NMW and award rates apply from the first full pay period starting on or after 1 July 2026.

Employers with enterprise agreements should also ensure the base rate of pay in an enterprise agreement remains above applicable modern award rates.

High income threshold and contractor high income threshold

The high income threshold (“HIT”) and contractor high income threshold will also increase from $183,100 to $190,100 on 1 July. This threshold is important as it determines unfair dismissal eligibility, the guarantee of annual earnings figure, compensation cap for unfair dismissal (being half of the HIT) and protections for employee-like workers.

Employers relying on a guarantee of annual earnings should confirm employees continue to be paid above the updated HIT to maintain these arrangements.

Redundancy tax-free thresholds

The tax-free components for redundancy payments will also increase to $13,598 plus $6,801 per year of service. Employers should ensure redundancy communications and calculations reflect these updated figures.

Government paid parental leave expansion

The Government’s paid parental leave scheme reaches its final stage of implementation on 1 July with the total entitlement increasing from 24 weeks to 26 weeks. Of these 26 weeks, reserved partner leave will increase from three weeks to four weeks. Reserved partner leave is forfeited if unused (although single parents are entitled to the full 26 weeks of pay).

Although the scheme remains government-funded, employers should review internal leave policies, particularly where they supplement or interact with government entitlements.

Payday super reforms

Following the increase of the superannuation guarantee to 12% in 2025, further reforms will take effect with the introduction of “payday super” on 1 July. Superannuation contributions will now need to be paid at the same time as wages (and received by an employee’s superannuation fund within seven business days), replacing the previous quarterly payment system.

Additionally, superannuation will now be calculated on “qualifying earnings” instead of “ordinary time earnings”. Qualifying earnings is a broader definition that includes ordinary time earnings as well as other items such as commissions and salary sacrifice contributions.

New restrictions on non-disclosure agreements

For Victorian employers, the Restricting Non-Disclosure Agreements (Sexual Harassment at Work) Act 2025 (Vic) is commencing on 1 July. This legislative reform limits the use of non-disclosure agreements (“NDAs”) in sexual harassment matters. Employers can no longer require workers to enter into NDAs that prevent disclosure of alleged sexual harassment.

NDAs will only be permitted where:

• the worker actively requests an NDA;
• the worker receives a prescribed information statement; and
• the worker is given 21 days to consider the agreement.

Even where these conditions are met, certain disclosures remain permitted (e.g. to police, lawyers and regulators) and a worker can terminate an NDA after 12 months.