Modern Awards Explained: How to Find Your Employee's Award

A modern award is a legal document that sets the minimum pay and conditions for everyone working in a particular industry or occupation, and you find the one that covers your employee by running the Fair Work Ombudsman's free Find My Award tool and then checking the result against the award's own coverage clause and classifications. Awards apply automatically, so if you employ staff, at least one almost certainly applies to you already. Here's how awards work, how to pin down the right one, what to pay if none fits, and what it costs to get it wrong.

What a modern award is

Modern awards are made by the Fair Work Commission under the Fair Work Act 2009. They sit on top of the National Employment Standards (the minimum entitlements every employee gets) and add the detail for a specific industry or job: minimum wages for each classification, penalty rates, overtime, allowances and rostering rules.

There are 122 awards in the Fair Work system (as at September 2026). Most are industry awards — retail, hospitality, construction, cleaning — that cover an employer because of the business it runs. A smaller group are occupation awards that follow the job rather than the business, the most common being the Clerks—Private Sector Award for admin staff.

Three things trip up new employers:

An award applies whether or not you know about it. You don't register for it, and not knowing isn't a defence.
A contract can't undercut it. Any term that gives less than the award is unenforceable and you'll owe the difference.
Rates change every year, from the first full pay period on or after 1 July. This year award rates rose 4.75%, alongside the other payroll changes for 2026–27.

Awards only apply to employees, so if a worker's status is unclear, settle the employee vs contractor question first.

How award coverage works

Every award has a coverage clause near the start that asks two questions, and both need a yes:

Does the award cover the employer? For an industry award, your business must operate in the industry as the award defines it. For an occupation award, it's the type of work the employee does that counts.
Does the employee fit a classification? Each award has a classification schedule describing levels of work with indicative duties, and the employee's actual day-to-day work has to match one of them.

Job titles are irrelevant: calling someone an "office manager" or a "consultant" doesn't move them out of an award. And one business can have staff under several awards — a cafe might have cooks and floor staff under the Restaurant Industry Award and a part-time bookkeeper under Clerks.

When two awards seem to fit

Awards mostly solve their own overlaps with express exclusions. The Clerks award steps aside when your industry award already has clerical classifications, so an admin assistant in a shop is under the General Retail Industry Award. The food awards divide the same way: takeaway food mostly eaten off the premises falls under the Fast Food Industry Award, sit-down cafes and restaurants under the Restaurant Industry Award, and restaurants inside hotels, motels and casinos under the Hospitality Industry (General) Award.

Where two awards could still both apply, most contain a tie-breaker: the employee takes the classification most appropriate to the work they do and the environment they do it in.

How to find your employee's award, step by step

Run Find My Award. Free at fairwork.gov.au, it asks about your industry and the employee's duties and names the award it thinks applies.
Read the coverage clause. Open the award and read clause 4 and the definitions it points to. The exclusions will often name the award you should be looking at instead.
Match duties to a classification. Find the level whose indicative duties best describe the job and write down why. Classifying someone one level too low is one of the most common underpayments the Ombudsman finds.
Check the rate with the Pay and Conditions Tool. Fair Work's calculator (P.A.C.T.) works out base rates, casual loading, penalties, overtime and allowances for that classification.
Keep a record. A one-page note — which award, which classification, why — is worth a lot if the Ombudsman asks, and it's a step the Voluntary Small Business Wage Compliance Code expects.
Revisit it when things change. Promotions, new duties or a change of business direction can change the answer.

Do this before the first day, not after; it belongs on your hiring your first employee checklist alongside the contract and super choice form.

What's inside an award

These are the sections you'll use most.

Section	What it sets	Why it matters
Minimum rates	Weekly and hourly rates per classification; junior, apprentice and trainee percentages	The floor for every hour worked; changes each 1 July
Types of employment	Full-time, part-time and casual rules, casual loading (25% in most awards), minimum shift lengths	Decides how you can roster and what a short shift costs
Hours of work	Ordinary hours, the span they can be worked in, maximum daily hours, breaks	Work outside the span attracts penalties even if total hours are normal
Overtime and penalty rates	Loadings for extra hours, weekends, public holidays, early mornings and late nights	The biggest gap between expected and true labour cost
Allowances	Uniforms, laundry, tools, meals, travel, first aid, split shifts	Small amounts that add up and are easy to miss
Consultation and disputes	How you must consult on major changes and roster changes	Skipping consultation is a breach even if the change is reasonable
Flexibility	Individual flexibility arrangements; annualised wage clauses in some awards	Terms can be varied, but only in writing and only if the employee is better off

Payroll software with the award built in — see our payroll software comparison — applies penalties and allowances automatically, but only as accurately as the award and classification you set up.

The awards small businesses use most

Award	Code	Who it covers
Clerks—Private Sector Award 2020	MA000002	Admin, reception and bookkeeping staff in private sector businesses whose industry award has no clerical classifications
General Retail Industry Award 2020	MA000004	Shops and other general retail businesses, including their admin staff
Hospitality Industry (General) Award 2020	MA000009	Hotels, motels, pubs, casinos, caterers and the restaurants inside them
Restaurant Industry Award 2020	MA000119	Stand-alone restaurants, cafes, reception centres, nightclubs and roadhouses
Fast Food Industry Award 2020	MA000003	Takeaway and food-court businesses where food is mostly eaten away from the premises
Building and Construction General On-site Award 2020	MA000020	On-site building, civil and engineering construction (electricians and plumbers have their own awards)
Cleaning Services Award 2020	MA000022	Contract cleaning, event cleaning, trolley collection and minor maintenance incidental to cleaning
Hair and Beauty Industry Award 2020	MA000005	Hairdressing, waxing, nails, massage and other beauty services
Miscellaneous Award 2020	MA000104	Employees no other award covers, except traditionally award-free managers and professionals

Award-free employees and the national minimum wage

Some employees genuinely aren't covered by any award — typically senior managers and professionals such as accountants, lawyers, marketing, HR and IT specialists, of a kind that have historically been award-free. Be careful, though: the Miscellaneous Award was written to catch everyone else, so read its coverage clause before you decide someone is award-free.

For employees who really are award and agreement free:

The national minimum wage applies: $26.44 an hour or $1,004.90 for a 38-hour week, and $33.05 an hour for casuals including the 25% casual loading (as at September 2026).
The National Employment Standards still apply in full — leave, public holidays, notice, redundancy and the rest.
There are no penalty rates, overtime rates or allowances unless the contract provides them.

Award-free is rarer than owners assume. A receptionist, warehouse hand or trades assistant is almost never award-free; the manager who runs the business day to day might be.

Enterprise agreements vs awards

An enterprise agreement is a set of pay and conditions negotiated between an employer and its employees (often with a union), voted on by staff and approved by the Fair Work Commission. The Commission will only approve it if every employee is better off overall than under the relevant award — the BOOT. Agreements have a nominal expiry date of up to four years from approval but keep operating after that until replaced or terminated.

While an agreement applies, the award's terms stop applying, though an agreement can't pay a base rate below the award minimum. For most small businesses the cost of bargaining and approval isn't worth it; apply the award and pay above it where you want to.

Salaried staff and the high income threshold

Paying a salary doesn't switch an award off. The award keeps applying unless you give the employee a written guarantee of annual earnings above the high income threshold of $190,100 (as at September 2026). Below that, the salary must be at least what the award would have paid for the hours actually worked — including overtime, penalties and allowances — and you need the records to prove it. Some awards, including Clerks, have annualised wage clauses with their own notification, record-keeping and reconciliation rules, so read them before putting someone on a salary.

What getting it wrong costs

Underpayment claims can reach back six years, with interest, and cover penalty rates, allowances, leave loading and super as well as base wages. Then there are the penalties. For contraventions on or after 1 July 2026, with the Commonwealth penalty unit at $364, the maximum civil penalty per contravention is $21,840 for an individual and $109,200 for a company with fewer than 15 employees; serious contraventions (deliberate and systematic) attract ten times those amounts, and larger companies face higher maximums again. Each employee and each pay period can be a separate contravention.

Since 1 January 2025, intentional underpayment has also been a criminal offence carrying up to 10 years' imprisonment. Honest mistakes aren't criminal, and small businesses that follow the Voluntary Small Business Wage Compliance Code — checking award coverage, paying the right rate, keeping records and fixing errors promptly — can't be referred by the Ombudsman for criminal prosecution over an underpayment. Following written Employer Advisory Service advice in good faith gives similar protection against civil penalties if that advice turns out to be wrong.

Key takeaways

A modern award applies automatically based on your industry or the employee's occupation and duties — you don't opt in, and a contract can't pay less than it.
Find the award with Fair Work's Find My Award tool, then confirm it against the coverage clause and classification schedule; duties matter, job titles don't.
Check the Miscellaneous Award before deciding anyone is award-free; genuinely award-free staff get the national minimum wage of $26.44 an hour plus the NES (as at September 2026).
A salary doesn't switch the award off unless it's a written guarantee above $190,100; below that it must cover every award entitlement for the hours worked.
Record your reasoning and follow the Voluntary Small Business Wage Compliance Code — penalties now run to $109,200 per contravention for a small company.

Where to get help

Fair Work Ombudsman (fairwork.gov.au) — Find My Award, the Pay and Conditions Tool, pay guides and the full list of awards. Fair Work Infoline 13 13 94, 8am–5.30pm Monday to Friday.
Employer Advisory Service — free written advice on awards and entitlements for employers with fewer than 15 employees, through the Ombudsman's website.
Fair Work Commission (fwc.gov.au) — the official text of every award, Annual Wage Review decisions and enterprise agreement approvals.
Voluntary Small Business Wage Compliance Code — download it from fairwork.gov.au and keep evidence that you follow it.
Your bookkeeper, accountant or payroll provider — for setting up award rules in payroll software and re-checking classifications each July.
An employment lawyer or HR adviser — for disputed coverage, annualised salaries or anything involving an enterprise agreement.