Protecting Penalty And Overtime Rates: Fair Work Act Changes

There have been changes to the Fair Work Act as part of the Australian Government's 'Protecting Penalty and Overtime Rates' laws.

Overview

On 30 August 2025, the Fair Work Act was updated with new provisions that aim to protect penalty rates and overtime rates in awards as part of the Fair Work Amendment (Protecting Penalty and Overtime Rates) Act 2025.

These changes affect the work of the Fair Work Commission (the Commission). The Commission is the national workplace relations tribunal and registered organisations regulator.

Tip: We're different from the Fair Work Commission

The Commission is the national workplace relations tribunal and registered organisations tribunal.

We're the Fair Work Ombudsman. Our role is to give you advice and assistance on workplace laws, including on the minimum wage increase.

Learn more about the difference between the Fair Work Ombudsman and the Fair Work Commission.

What's changed

The Fair Work Act now includes a new principle that the Commission must consider when setting award terms and conditions.

The new principle requires the Commission to ensure that penalty rates and overtime rates under an award aren't reduced.

It also ensures that awards don't include terms that substitute an employee's entitlement to penalty rates or overtime rates, where those terms would result in the employee being paid less than they otherwise would. This includes for working:

  • overtime
  • shifts
  • weekends or public holidays, or
  • unsocial, irregular or unpredictable hours.

The new principle won't impact the:

  • operation or application of flexibility terms (for example, entering into individual flexibility arrangements)
  • Commission's ability to vary an award to remove ambiguity, uncertainty or to correct an error, or
  • making of enterprise agreements.

The changes apply to:

  • proceedings in the Commission already underway
  • proceedings or matters in the Commission that start on or after 30 August 2025.

These changes don't affect any existing annualised salary arrangement terms in awards or any other information on our website.

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