EOFY workplace update: Key changes from 1 July 2026

Several key workplace reforms will come into effect from 1 July 2026, with implications for employee entitlements, payroll processes and workforce planning. This update outlines the main changes employers should be aware of and the practical steps required to prepare.

This article provides an overview of key workplace reforms taking effect from 1 July 2026 and their practical implications for employers.

Minimum wage increase

On 2 June 2026, the Fair Work Commission (FWC) announced its decision in the 2026 Annual Wage Review to increase the National Minimum Wage (NMW) and modern award rates, effective from 1 July 2026.

The NMW is set to increase by 6%, reaching $1004.90 per week or $26.44 per hour, while minimum wage rates under modern awards will see a 4.75% rise.

Compliance

Employers must take proactive steps to ensure compliance. Key actions include:

• Reviewing pay rates: Confirm that pay rates for employees under modern awards, enterprise agreements, and individual agreements meet the new requirements.
• Updating payroll systems: Work with payroll providers or internal teams to ensure the new rates are implemented accurately without delay.
• Communicating with employees: Inform affected employees to manage expectations and reduce the risk of disputes.
• Maintaining records: Keep detailed and accurate records of pay rates and hours worked to comply with the Fair Work Act 2009 (Cth).

Managing the budgetary impact

The wage increases are likely to have a significant impact on business budgets, particularly for small businesses. Employers should:

• Review financial projections: Assess the potential impact of increased labour costs and adjust financial forecasts to ensure sustainability.
• Evaluate staffing levels: Consider whether adjustments to rosters are necessary to manage the additional expenses.
• Improve efficiency: Explore opportunities to streamline operations to offset the financial impact of higher wages.

Adapting workforce management strategies

The increase may also necessitate adjustments to workforce management practices. Employers should:

• Review employment contracts: Ensure all employment contracts are updated to reflect the revised wage rates and comply with relevant industrial instruments.
• Provide training: Equip managers and HR teams with the knowledge and tools needed to address employee questions and concerns regarding the changes.
• Monitor employee morale: Assess and address the potential impact of wage adjustments on employee engagement and satisfaction, particularly if changes to staffing levels or work hours are required.

Anticipating claims

The increase may result in a rise in wage-related disputes. Employers should:

• Prepare for increased underpayment claims: Conduct regular payroll audits to ensure compliance with the new minimum wage requirements and address any discrepancies to avoid disputes.
• Review and adjust entitlements: Ensure that entitlements, such as superannuation contributions, leave loading, and penalty rates, are updated to reflect the revised wage rates.
• Anticipate heightened scrutiny: Be proactive in identifying and addressing compliance risks, particularly in businesses with a history of underpayment issues, as the Fair Work Ombudsman is likely to increase enforcement efforts.

These reforms present both challenges and opportunities for employers. By taking steps to ensure compliance, businesses can navigate these changes effectively while reducing the risk of disputes. Employers are encouraged to seek legal guidance if they have any concerns regarding their obligations or the implications of the reforms.

Introduction of payday super

From 1 July 2026, employers will be required to move from quarterly Super Guarantee Contributions to contributions being made within 7 business days of each pay cycle.

Under the upcoming Treasury Laws Amendment (Payday Superannuation) Act 2025 (Cth), the timeframe and calculation of Super Guarantee Contributions are changing.

Key changes

Some of the key changes include:

• Super Guarantee Contributions will be required within 7 business days of each payday, replacing the current quarterly payment cycle.
• An extended timeframe will apply for certain exceptions, such as new employees, out-of-cycle payments, and overlaps in due dates.
• Contributions will no longer be calculated as 12% of Ordinary Time Earnings (OTE). Instead, they will be calculated as 12% of Qualifying Earnings (QE), a new term that includes OTE, all commissions, salary sacrifice contributions and other amounts that are currently included in the employee’s salary or wages.
• Both OTE and super liability will be reported through Single Touch Payroll.
• The use of SuperStream data is intended to eliminate administrative delays between employers sending and super funds receiving payment.
• New member verification requests and improvements will be made to the Fund Validation Service to improve awareness of any key changes to super fund details for employers and employees.

Effects of non-compliance

In the case of non-compliance where amounts aren’t received by a super fund within the relevant 7 business days, the Super Guarantee Charge (SGC) is levied against an employer.

Whilst the SGC has been in effect before, there are several changes to its administrative process. Under the Scheme, the SGC will now be calculated based on qualifying earnings, rather than salary, and has a daily compounding interest rate. It will also now be tax deductible and include an administrative uplift based on an employer’s compliance history rather than self-assessment, although this may be reduced by voluntary disclosure.

Further, penalties for non-compliance have been lessened, presumably in accordance with the smaller amounts that will be paid each payday rather than quarter, and instead of being a maximum 200% of the SGC, will now amount to 25% or 50% of the SGC, depending on any prior penalties.

What does this mean for your business?

The Scheme is aimed at ensuring employees are receiving their superannuation entitlements in a prompt, efficient and comprehensive manner. Businesses should ensure their systems automatically incorporate Super Guarantee Payments into the same processes as salary and wage payments as soon as possible, to guarantee compliance with the new Scheme and avoid the risk of possible financial and reputational damage as a result of non-compliance.

Expansion of paid parental leave

From 1 July 2026, Australia’s government-funded paid parent leave (PPL) scheme will increase from 24 to 26 weeks for eligible parents whose child is born or adopted on or after that date. The leave is paid at the minimum wage and may be taken flexibly, with entitlements used within two years of the child’s birth or adoption. The increase to 26 weeks marks the final stage of the government’s planned expansion of PPL.

From 1 July 2025, superannuation contributions have been payable on government-funded parental leave at the applicable superannuation guarantee rate. Additionally, 20 days of PPL are reserved for the second parent on a 'use it or loss it' basis, encouraging equal sharing or caregiving responsibilities. Superannuation is also payable on these reserved days.

The policy intent behind these reforms is to increase workforce participation, particularly among parents, and to promote gender equality in unpaid care work. By supporting shared parental responsibility and financial security during leave, the reforms aim to strengthen long-term workforce attachment.

For employers, the expanded PPL scheme may increase complexity in workforce planning and leave management. Leave can be taken in separate blocks or staggered over time, making absences less predictable across the first two years following birth or adoption. Employers should review parental leave policies, payroll systems and resourcing strategies.

These reforms follow earlier amendments known as 'Baby Priya's law', which strengthened protections for employees experiencing stillbirth or infant loss and ensured employer-funded paid parental leave cannot be refused.

Victoria fast-tracks restrictions on NDAs in workplace sexual harassment claims

The Victorian Parliament has brought forward the date on which restrictions on the use of Non-Disclosure Agreements (NDAs) in sexual harassment claims will take effect. The new commencement date is 1 July 2026 (previously 1 November 2026).

Careful attention will need to be given to the drafting of NDAs going forward to ensure compliance with the amendments and enforceability (to the extent allowed).

By moving the commencement date forward, employers should, if they have not already done so, review and update their policies, practices and procedures regarding the prevention, reporting and addressing of allegations of sexual harassment, bullying and unlawful discrimination.

You can read our detailed article on the legislation and its implications for employers here.

Victoria Introduces legislation to establish right to work from home two days a week

The Victorian Government has introduced the Equal Opportunity Amendment (Work from Home) Bill 2026 (Bill) into parliament. The Bill sets out the proposed framework to enshrine the 'right' for Victorian Workers to work from home 2 days a week. While close attention will need to be given to its passage to see whether any amendments are made, in its present form, it provides a mechanism for employees to request to work from home. The mechanism requires employers to respond to the request within 21 days and provides grounds to refuse such a request. It creates means for disputes to be pressed through the Victorian Equal Opportunity and Human Rights Commission and the Victorian Civil and Administrative Tribunal further to creating a new 'workplace right'.

Employers should take this opportunity to proactively seek advice to prepare for the legislation to ensure that there is clarity on the inherent requirements of various roles and responsibilities by reference to the criteria set out therein especially if there is an intention to require workers to be present in the office on a full time basis.

Implications for employers

These reforms signal a continued focus on strengthening employee entitlements and increasing regulatory oversight across key areas of the employment lifecycle.

For employers, early planning and a proactive approach to compliance will be critical in managing risk and supporting a smooth transition.