Employment law changes 2026: What businesses need to know

Several significant changes to Australian employment law are either already in effect or approaching their commencement dates.  

This article covers the key employment law changes in 2026 that businesses need to be across: the Annual Wage Review, the introduction of Payday Super, changes to Paid Parental Leave, the proposed ban on non-compete clauses, and the National Employment Standards review.  

For each change, we explain what's happening, when it takes effect and what employers should be doing to prepare.

Each year, the Fair Work Commission (FWC) reviews the National Minimum Wage and all modern award rates. The 2026 Annual Wage Review is currently underway, with a decision expected in early June 2026 and new rates taking effect from 1 July 2026.

The Australian Council of Trade Unions has submitted to the FWC for a five percent increase, which would lift the minimum wage to approximately $26.19/hr, or roughly $994/week for a 38-hour week. 

Meanwhile, employer groups the Australian Chamber of Commerce and Industry and Ai Group have proposed increases of 1.5% and 1.8% respectively, pointing to easing inflation and pressures on small businesses.

What does the 2026 Annual Wage Review mean for your business?

If any of your employees are paid at or near award rates, you'll need to update those rates from the first full pay period on or after 1 July 2026. If you're unsure which awards apply to your team, or whether your current rates are already compliant, now is a good time to check or seek expert guidance.

A broader signal worth noting: NSW nurses and midwives awarded pay rise

The annual review isn't the only wage story this year. In April 2026, the NSW Industrial Relations Commission (IRC) awarded pay rises of 16–28% to public sector nurses and midwives employed by NSW Health.

This decision has no direct flow-on to private sector employers or those operating under federal awards. But it's worth noting why the NSW IRC increased wages: it found nursing and midwifery work had been substantially undervalued, in part because the workforce is predominantly female.

The FWC has been moving in a similar direction at the federal level, with gender undervaluation now an explicit consideration under the updated modern awards objectives.  

Several employment law changes are confirmed for 2026, with one further significant reform proposed for 2027. Here are the key changes businesses need to be across. 

1. Introduction of Payday Super - One of the most significant payroll changes in years, Payday Super requires employers to pay superannuation guarantee contributions at the same time as wages. From 1 July 2026, super contributions must be received by an employee's fund within seven business days of each payday. Read our articles for a breakdown of the Payday Super changes and the penalties that can apply for non-compliance.  
2. Changes to Paid Parental Leave - Government-funded Paid Parental Leave (PPL) will increase to 26 weeks (130 days) from 1 July 2026, up from 24 weeks in the prior year. The leave reserved exclusively for each parent in a couple on a use-it-or-lose-it basis will also increase from three to four weeks. For employers, this means planning for potentially longer periods of absence and ensuring your parental leave policies, employment contracts and payroll systems reflect the updated entitlement. Superannuation on government-funded PPL is paid directly to employees' super funds by the ATO, but this should be factored into workforce planning alongside the payday super changes. 
3. Ban on non-compete clauses - The Commonwealth Government has announced its intention to ban non-compete clauses for workers earning below the high-income threshold (currently $183,100 per annum). The ban is expected to take effect in 2027, following legislation. The Treasury is also consulting on related restraints including non-solicitation clauses, no-poaching agreements and wage-fixing arrangements. Employers should begin identifying which employment contracts include non-compete clauses and consider what alternative protections (such as narrowly drafted confidentiality or IP clauses) may be appropriate once legislation passes.

In November 2025, federal parliament launched an inquiry into the operation and adequacy of the National Employment Standards — the minimum employment conditions that apply to all employees under the Fair Work Act 2009 (Cth). It’s the first comprehensive review since the Act commenced.

What the National Employment Standards review is examining

Key areas under review include:

• Whether minimum annual leave should increase from 20 to 25 days (five weeks) 
• Whether redundancy provisions need to be updated to reflect technology-driven job losses, including AI-related restructures 
• The protection of women and working parents, including removing or shortening the 12-month service requirement for unpaid parental leave and creating dedicated carer's leave entitlements 
• Long service leave harmonisation — replacing the current patchwork of state-based schemes with a single national standard 
• Entitlements for casual and insecure workers, including extending paid leave to casuals 
• The impact of AI and automation on workforce composition and redundancy obligations. 

The National Employment Standards review has received submissions from unions, employer groups, academics and advocacy organisations. Employer groups have consistently flagged the disproportionate impact of any expansion on small and regional businesses. 

What’s the progress of the National Employment Standards review?

Written submissions closed in late February 2026. The parliamentary committee is now working through the evidence before making formal recommendations to government.  

Employers should monitor the outcome carefully, as any changes flowing from the inquiry could affect leave accruals, redundancy calculations, employment contracts and workforce planning.

Keeping up with employment law changes is genuinely demanding for any business. Avant's HR Advisory team acts as your outsourced HR department, giving you expert support across the full employee lifecycle — from recruitment and onboarding through to performance management, policies and compliance, and terminations and redundancies.  

Whether you need a one-off audit of your employment contracts and HR processes or ongoing guidance as the law evolves, you get senior HR expertise without the overhead of a full-time hire. 

Book a complimentary 30-minute consultation with our HR Advisory team to discuss your situation and how we can help you prepare for what's ahead.

1. What does the 2026 Annual Wage Review mean for employers? 

The 2026 Annual Wage Review determines the National Minimum Wage and updates all modern award rates, with new rates taking effect from the first full pay period on or after 1 July each year. 

Employers with staff on award rates need to apply the updated rates from that date. If you are unsure which awards cover your employees, or whether your current rates are compliant, an employment contract and award audit is a practical first step. 

2. What are the key employment law changes in 2026 businesses need to prepare for? 

The most immediate employment law changes in 2026 are the introduction of Payday Super and the increase to government-funded Paid Parental Leave, both commencing 1 July 2026. 

Payday Super requires super contributions to be paid and received by the employee's fund within seven business days of each payday — replacing the previous quarterly model. Meanwhile, Paid Parental Leave increases from 24 to 26 weeks. 

3. What is the National Employment Standards review and what could it change? 

The 2026 National Employment Standards review is a parliamentary inquiry examining whether Australia's minimum employment conditions remain fit for purpose. Key areas under consideration include increasing minimum annual leave from 20 to 25 days, updating redundancy provisions and extending entitlements to casual workers.