The Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill 2025 (the Bill) seeks to amend the Fair Work Act 2009 to ensure that: 

• pre-existing penalty and overtime rates in modern awards are not reduced, and
• no terms are included in modern awards that would substitute penalty or overtime rate entitlements with alternative entitlements that would reduce additional remuneration from penalty or overtime entitlements that any employee would otherwise receive.

This paper provides an overview of penalty and overtime rates in Australia. It presents key issues and provisions of the Bill, and summarises the policy position of non-government parties and independents, and the position of relevant stakeholders. The Coalition noted several concerns with the Bill. Views of employer and employee stakeholders regarding the Bill are polarised.

Key points

• The Bill does not impose any obligation to include penalty or overtime rates in modern awards or enterprise agreements.
• The Bill does not provide protections for penalty or overtime rates in enterprise agreements.
• The Australian Government introduced an amendment to the Bill to clarify that no requirement would be imposed on the Fair Work Commission to undertake a review of all modern awards, initiate a review of any award terms outside the scope of an application before it, or exercise its powers to make, vary or revoke modern awards.