Correcting the Record: Gender-Based Undervaluation and the Children’s Services Award

Overview of Changes to the Children’s Services Award

As of 1 March 2026, significant changes to the Children’s Services Award take effect as a result of the Gender-Based Undervaluation – Priority Awards Review.

In June 2024, the Fair Work Commission (FWC) announced the results of the Annual Wage Review 2023-24. This involved identification of five (5) Modern Awards covering industries composed of largely female workers that required priority assessment of historic gender-based undervaluation.  Among the identified awards, was the Children’s Services Award [MA000120] (Award), which covers the early childhood education and care (ECEC) sector.

Fair Work Commission Findings on Undervaluation

In April 2025, the FWC published its first substantive findings. The FWC found that children’s services employees (CSEs) covered by the Award have been undervalued on a gender basis. The FWC compared early childhood educators with workers in the aged care sector and concluded that the duties, responsibilities and required skills were broadly comparable. As a result, the FWC determined that pay rates should also be comparable, warranting the introduction of an entirely new classification structure and pay rates.

The most significant change is a complete overhaul of classifications under the Award, with amendments to Schedule B and Schedule I of the Award. Previously, the Award contained 36 different minimum pay rates, spread across a complex and difficult‑to‑apply structure. From 1 March 2026, this is replaced with eight new classification levels, based on:

• qualifications;
• experience; and
• the nature and responsibility of the role.

The aim is to make the award easier to understand, easier to apply, and better aligned with how the ECEC sector actually operates.

Pay Increases

While the total increase is significant, they will not happen simultaneously. Pay rises will be phased in over 5 years to help employers manage the cost impact:

• The first increase applies from the first full pay period on or after 1 March 2026.
• For most employees, this initial increase is 5 percent.
• Further increases will apply from 30 June each year, building toward the total uplift.

The FWC acknowledged cost pressures in the sector and noted that some employers may offset early increases through the Commonwealth’s Worker Retention Payment (WRP) Scheme, which is currently funded until November 2026.

Take Action Now

These changes create clear compliance obligations for ECEC employers. The most critical step is correctly reclassifying employees under the new structure from 1 March 2026. This requires employers to:

• conduct a careful assessment of each employee’s qualifications, experience and role duties and correctly classifying each employee under the new structure;
• adjusting pay rates accordingly;
• updating employee’s employment documents to reflect the new classification;
• updating payroll systems to reflect the updates.

Employers participating in the WRP Scheme must also ensure payments are correctly calculated. The requirement to pay above‑award rates continues, but those percentages must now be applied to the new, higher award rates. Failing to comply can expose employers to liability for underpayment of wages and entitlements, carrying significant penalties and regulatory action.

We’re With You

At Chamberlains Law Firm, we provide clear, practical advice to help ECEC providers navigate Award changes, payroll compliance and workforce risk. If you need assistance reviewing classifications, updating payroll systems or understanding your obligations, don’t go it alone, our Workplace Team is here to help and ensure your business stays compliant.

Contact our Workplace Law Team for further assistance.

This article was prepared by Isabella Turner.