Annual Wage Review 2026: what the latest FWC update means for the ECEC sector

The Fair Work Commission has released new Annual Wage Review 2026 material, with the outcome set to influence educator wages, workforce retention and service viability across early childhood education and care.

The Fair Work Commission (FWC) has published a new set of documents for the Annual Wage Review 2026, including supplementary submissions, Statistical report – version 6 and an updated research reference list.

While the documents form part of the review’s routine evidence cycle, they carry particular weight for the early childhood education and care (ECEC) sector – a workforce that remains heavily award-reliant, structurally undervalued and central to national workforce participation.

With the review moving closer to a decision, expected in June, the latest data and submissions offer signals about the wage environment educators and providers may face in 2026–27.

Where the review is up to, and why ECEC should pay attention

The Annual Wage Review is conducted each financial year by the FWC’s Expert Panel, which reviews and sets minimum wages for employees in the national workplace relations system.

The review determines the National Minimum Wage and adjusts modern award wages, including awards that cover parts of the ECEC workforce, such as the Children’s Services Award and Educational Services (Teachers) Award.

For a sector where award wages remain a key benchmark, the review’s outcome can directly shape:

• educator attraction and retention
• service viability and fee pressures
• workforce budgeting and payroll planning
• wage competitiveness
• recruitment strategies
• alignment with broader workforce reforms
• the pace of recovery from real wage decline.

The release of supplementary submissions and updated statistical data marks a key point in the process, as the Expert Panel moves closer to finalising its economic assessment.

What the new data suggests for ECEC

Statistical report – version 6 provides an updated picture of the economic conditions the Panel must weigh. Several indicators are particularly relevant to ECEC.

Real wages remain fragile

While nominal wage growth has improved, cost-of-living pressures continue to affect low-paid workers, including many educators.

Inflation in essential categories such as rent, food, insurance and utilities remains particularly relevant for award-reliant workers, who often have limited capacity to absorb sustained price increases.

Labour market pressure persists in care and education

Workforce shortages remain a central concern for ECEC, with many services continuing to report challenges attracting and retaining qualified educators and teachers.

For the sector, the wage review will be read not only as an industrial decision, but as one part of the broader workforce sustainability picture.

Productivity data remains contested

Employer groups often point to productivity and operating cost pressures when arguing for more cautious wage adjustments.

Unions and worker representatives are more likely to emphasise cost-of-living pressures, real wage recovery and the need to improve wages in low-paid and feminised sectors.

The Panel must balance these competing arguments in setting the 2026–27 wage outcome.

Gender pay equity remains central

ECEC remains a highly feminised workforce, meaning gender-based undervaluation continues to be an important contextual issue.

The Annual Wage Review also sits alongside broader work value, supported bargaining and workforce reform processes that are focused on improving pay and conditions across care sectors.

What stakeholders are arguing

The newly published supplementary submissions show stakeholders sharpening their positions ahead of the decision.

Unions have continued to emphasise cost-of-living pressures, real wage recovery and the need to address low-paid, feminised workforces.

Employer groups have highlighted operating cost pressures, including rent, insurance, compliance and payroll costs, and have warned against wage increases that could intensify pressure on businesses and services.

Government submissions typically focus on macroeconomic stability, inflation moderation and wage growth that aligns with broader economic conditions.

For ECEC, the tension is clear: educators need wages that support attraction and retention, while providers are managing rising operating costs and limited capacity to absorb further increases without affecting fees or viability.

How this intersects with broader ECEC workforce reforms

The 2026 review does not occur in isolation. It sits alongside:

• supported bargaining processes
• gender-based work value cases
• state and federal workforce strategies
• unresolved questions about long-term workforce retention payments
• the sector’s reliance on award wages as the baseline for career progression.

The review’s outcome will influence, and be influenced by, these parallel processes.

A higher award increase may help ease retention pressures and improve wage competitiveness, but could intensify cost pressures for providers. A lower increase may offer short-term budget relief for services, but risks worsening workforce shortages and educator turnover.

What happens next

The Commission will now:

• review final submissions
• consider updated statistical and research material
• begin internal deliberations
• release the Annual Wage Review 2026 decision, expected in June.

The decision will set the percentage increase to the National Minimum Wage and modern award wages, including awards covering ECEC educators and teachers.

Bottom line for the ECEC sector

The latest FWC update confirms that the review is moving into its decisive stage, and the stakes for ECEC remain high.

With workforce shortages continuing, cost-of-living pressures affecting educators and broader reform processes underway, the 2026 wage decision will play a significant role in shaping the sector’s stability, competitiveness and workforce sustainability over the next 12 months.