Reform of "Introductory" Classification Levels
6 mins read
Published Jan 1, 2025
The Fair Work Commission amended 37 modern awards, including the Hospitality Industry (General) Award and several manufacturing/labor awards, to limit how long an employee can stay on "Introductory" or "Level 1" pay rates. Most affected awards now mandate that employees must progress to a higher pay level after a maximum of 6 months (or sooner if they meet competency benchmarks), preventing "stagnant" lower-rate pay cycles.
The Change
A significant reform spearheaded by the FWC involves the Review of C14 and C13 rates, which has effectively restricted or eliminated the use of "Introductory" classification levels in several modern awards, including the Hospitality Industry (General) Award. From 1 January 2025, employees can no longer be kept on introductory pay rates indefinitely. Most awards now mandate that an employee must progress to a higher classification (e.g., Level 1 or 2) after a maximum of 3 to 6 months or upon achieving certain competencies.
Implications for SMB Owners
In industries like hospitality and construction, it was common practice to keep junior or new staff on "Introductory" rates for long periods to manage costs. Under the new rules, this is a major compliance trap. SMB owners must now track the "tenure" of every employee against their specific award's progression timeline.
Failing to "bump" an employee to a Level 1 rate on the exact day they hit their 6-month anniversary creates an underpayment. For businesses with high turnover, managing these individual "anniversary" pay rises manually is nearly impossible, making an automated monitoring engine a critical tool to prevent systemic underpayment.
