Last week, the Federal Government’s legislation to protect penalty rates and overtime pay was passed. The ‘Protecting Penalty and Overtime Rates Bill 2025’ introduces a new section to the Fair Work Act, establishing a guiding principle for the Fair Work Commission when making, varying, or revoking modern awards. 

Under the change, the Commission must ensure that award provisions do not reduce an employee’s entitlement to penalty or overtime rates, nor replace those entitlements with arrangements that leave workers financially worse off.

Beyond being aware of the reforms, employers are not required to take any immediate action. Actions for employers will arise only once relevant changes are made to the awards applying to their workforce. Business Chamber Queensland will continue to monitor developments and keep businesses updated.