Fair Work wage rise puts early childhood workforce in focus

The Fair Work Commission's latest wage decision has delivered a pay increase for millions of award-reliant workers while drawing renewed attention to the workforce challenges facing female-dominated sectors such as early childhood education and care.

The Fair Work Commission has announced a 4.75 per cent increase to modern award minimum wages from 1 July 2026, a decision expected to benefit almost 2.8 million workers across Australia.

What this means for the Worker Retention Payment

The increase also has implications for the ECEC Worker Retention Payment, which funds a 15 per cent wage uplift above applicable award rates for eligible educators and teachers.

Because the 4.75 per cent award increase applies from 1 July 2026, services accessing the payment will need to calculate the retention uplift against the new, higher award rates.

For educators and teachers, this means the payment should increase in dollar terms. For approved providers, it creates an additional payroll and compliance step, with services needing to ensure grant-funded wage increases continue to sit above the updated award minimums.

The increase comes at a time when workforce sustainability, educator retention and gender equity remain key concerns for the early childhood education and care (ECEC) sector.

In its Annual Wage Review 2026, the Commission highlighted that modern award-reliant workers are more likely to be female, work part-time hours and occupy lower-paid roles than the broader workforce. More than 60 per cent of award-reliant employees are women, more than 70 per cent work part time and more than one-third are classified as low paid.

The Commission acknowledged that the increase is likely to make a contribution towards reducing the gender pay gap, noting that award-reliant employees are predominantly female.

Significance for early childhood education and care

The findings carry particular significance for ECEC, where women comprise the vast majority of the workforce and where recruitment and retention pressures continue to affect services across the country.

The Children’s Services Award remains one of the largest modern awards in Australia, covering a workforce that is 97.1 per cent female according to Fair Work Commission data.

While the wage increase is expected to provide some relief for educators facing ongoing cost-of-living pressures, the Commission noted that many award-reliant workers are still recovering from the impact of recent inflationary increases, which have eroded real wages over recent years.

The decision lifts the national minimum wage to $1,004.90 per week, or $26.44 per hour, and includes additional adjustments for the lowest-paid classifications within the award system.

Gender equity remains a central issue

The Commission’s review also reinforced the growing focus on gender equity across Australia’s industrial relations framework.

Although no new gender undervaluation proceedings were initiated as part of this year’s review, the Australian Council of Trade Unions identified early childhood educators among occupations where concerns about historical gender-based undervaluation remain.

The Commission acknowledged these submissions and indicated that further consideration of priority sectors may occur as part of future reviews.

The discussion comes amid broader national efforts to address the value of work performed in female-dominated professions, particularly those delivering education, care and community services.

For ECEC, the latest wage decision is likely to add momentum to ongoing conversations about educator pay, retention, professional recognition and the long-term sustainability of the workforce.

Watch the replay of the hearing here and access the Fair Work Commission reports here