Every July brings a wave of workplace law changes. Most years you can absorb them with a payroll update and a quick policy review. 2026 is not that year.
The changes landing on 1 July 2026 are structural — not cosmetic. They alter how super is paid, how parental leave is funded, what counts as a criminal offence in the workplace, and what your award demands of you week to week. They affect cash flow, payroll architecture, director liability and culture — often at the same time.
This isn’t a compliance checklist. It’s a strategic shift in how Australian employers are expected to operate. Here’s what’s actually changing, and what to have done before the date.
1. Payday Super — the cash flow change most businesses are underestimating
From 1 July 2026, employer super contributions must reach the employee’s fund within seven business days of every payday — not quarterly as they do now.
Three things tend to get missed:
- The cash flow impact is real. Many businesses use the quarterly super gap as a working capital buffer. That buffer disappears overnight. If you’re forecasting the year ahead, model this now — not in June.
- The ATO Small Business Super Clearing House closes on 30 June 2026. If that’s how you currently process super, you need a SuperStream 3.0–compliant alternative in place before then. Speak to your payroll software provider now, not later.
- Director personal liability remains. Unpaid super continues to attract Director Penalty Notices, and repeated lateness can trigger Super Guarantee Charge penalties of 25–50% of the unpaid amount. Under Payday Super, “late” becomes a far more frequent risk.
What to do this quarter: confirm software readiness, transition off SBSCH, run a test pay cycle in May or June, and brief your accountant or bookkeeper. They can’t fix what they don’t know is coming.
2. The Annual Wage Review — and the documents you need to re-check
The Fair Work Commission’s Annual Wage Review decision will be announced in early June 2026. Increases to the national minimum wage and all modern award minimum rates and allowances will apply from the first full pay period on or after 1 July 2026.
Last year’s increase was 3.5%. The 2026 decision will be in a similar range — and that’s enough to break compliance for arrangements that were sitting comfortably under the previous rates. Three documents need a hard look the moment the decision drops:
- Better Off Overall Test (BOOT) — for enterprise agreements. Every EA must leave employees better off overall than the underlying award. When award rates rise, the BOOT margin compresses. An agreement that passed the BOOT comfortably in 2024 can fail it in 2026 without a single word changing. If you have an EA in place, model the new award rates against your agreement rates the week the decision lands — and again before each pay run if you’re close to the line.
- Individual Flexibility Arrangements (IFAs). IFAs must also leave the employee better off overall than the award. Most IFAs were drafted against the rates that applied when they were signed — they don’t auto-adjust. A 3–4% award increase can quietly tip an IFA into non-compliance, exposing you to back-pay liability and rendering the arrangement unenforceable. Review every active IFA against the new rates and re-paper any that no longer pass.
- Annualised salary arrangements. This is the highest-risk category — and the one the regulator is watching most closely after Woolworths and Coles. An annualised salary must cover every entitlement the award would otherwise provide in every pay period, including overtime, penalty rates, allowances and loadings. When award rates rise, the salary that covered everything in 2025 may not cover it in 2026.
The practical implication: as soon as the FWC decision is published in June, your award-covered annualised roles need a pay-period-by-pay-period reconciliation against the new rates before the first July pay run, not after.
What to do in June: diary the FWC decision date, brief payroll and finance, and have your award rate tables, EA modelling spreadsheet, IFA register and annualised salary reconciliations ready to update the same week.
3. Wage theft becomes a criminal offence
Intentional underpayment of wages, super, leave or termination entitlements is now a criminal offence — with maximum penalties of 10 years’ imprisonment for individuals and $8.25 million (or three times the underpayment, whichever is greater) for companies.
The critical word is intentional. Honest mistakes, miscalculations and good-faith misclassifications remain civil matters — not criminal. But the bar for “intentional” is lower than many directors realise: knowingly using a salary that doesn’t cover award entitlements in every pay period can meet it.
The recent Woolworths and Coles Federal Court decision is the case every HR leader and business owner should read. Roughly $1 billion in combined remediation, and a ruling that set-off clauses cannot offset overpayments in one pay period against underpayments in another. Every pay period must stand on its own. The Super Retail Group class action — covering Supercheap Auto, Rebel, BCF and Macpac — alleges the same structural issue with annualised salaries.
If you have salaried roles covered by a modern award, audit them now. Pay-period by pay-period. This is the single highest-risk compliance issue in 2026.
4. Paid Parental Leave reaches 26 weeks — with super
From 1 July 2026, government-funded PPL reaches 26 weeks (130 days), the final stage of a phased expansion. Four weeks are reserved for the second parent on a “use it or lose it” basis. Single parents retain access to the full 26 weeks.
For the first time, 12% superannuation is payable on PPL — paid directly by the ATO to the employee’s nominated fund. No payroll administration for employers.
The practical implication isn’t payroll — it’s policy. Most internal parental leave policies were written when PPL was 18 or 20 weeks. They need updating to reflect the new entitlement, the reserved weeks for the second parent, and how your own employer-funded leave interacts with the government scheme.
5. Awards are tightening — workplace delegates’ rights and casual conversion
If your workforce is covered by a modern award, two changes deserve attention:
- Workplace delegates’ rights (cl. 34A in many awards) now give union delegates an entrenched right to represent members, communicate reasonably with them, and access paid training time. Refusing or obstructing is a breach.
- Casual definition and conversion changed materially under the Closing Loopholes amendments (effective 26 August 2024). Existing casuals were grandfathered; new casuals are not. The pathway from casual to permanent has shifted from employer-offer to employee-request — and you need to know which framework applies to whom.
6. Psychosocial hazards — the duty is not new, but enforcement is
Your duty as a PCBU to eliminate or minimise psychosocial risks “so far as is reasonably practicable” has been in force for some time. What’s changed is regulator focus and the expectation of documented, four-step risk management: identify, assess, control, review.
A policy is not a control. Training is not a control. These sit in the “lower-order” support tier. The genuine controls are job design, workloads, role clarity, effective supervision and visible leadership — what good organisations call changing the work, not the worker.
If your psychosocial hazard register doesn’t exist, or hasn’t been reviewed in 12 months, that’s your June priority.
What to do before 1 July
In order of risk and timing:
- Diary the FWC Annual Wage Review decision date in June and have your BOOT model, IFA register and annualised salary reconciliations ready to update the week it drops.
- Audit salaried roles for award compliance — pay period by pay period — against the new rates.
- Confirm Payday Super readiness with your payroll software provider and exit the SBSCH.
- Update your parental leave policy to reflect the 26-week, super-inclusive scheme.
- Review your psychosocial hazard register and the four-step risk process.
- Brief your leaders — most of these changes affect line managers more than HR.
None of this is optional. All of it is manageable with the right plan. The organisations that handle 1 July well will be the ones that started in May.
If you’d like a tailored briefing for your leadership team, or an audit of your salaried roles before 1 July, [book a 30-minute consult with Claire →]
Claire Harrison is the Founder and Managing Director of Harrisons, a flourishing HR consulting business that sprouted in 2009 from Claire’s passionate belief that inspiring leaders and superstar employees are the key success factor to any business. With over 20 years’ experience, Claire has worked as a HR Director of multi-national organisations, as a Non-Executive Board Director, and a small business owner. Claire’s corporate career includes working with companies such as BHP, Westpac, Fonterra and Mayne Nickless.
