The Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill 2025 has become law. It amends the Fair Work Act to protect penalty and overtime rates for modern award-reliant employees.
The Fair Work Commission must ensure that:
- penalty rate and overtime rates in modern awards are not reduced: and
- modern awards don’t include terms that substitute employees’ entitlements to receive penalty rates or overtime rates, where those terms would have had the effect of reducing the additional remuneration employees would otherwise receive.
Take Out Point: Employers cannot rely on alternative award terms or “loaded rates” to bypass penalty or overtime obligations. If an employee is award-reliant, entitlements must be preserved in both form and effect.
See: Fair Work Amendment (Protecting Penalty and Overtime Rates) Act 2025