Workplace Law Update – Amendments effective from 1 July 2026
Authors: Sarah Younis & Simone Gangal
From 1 July 2026, changes to employment law matters came into effect in relation to the high-income threshold, contractor high-income threshold, compensation cap for unfair dismissal claims and parental leave.
The high-income threshold has increased to $190,100 for dismissals on or after 1 July 2026. Employees not covered by a modern award or enterprise agreement who earn above the high-income threshold cannot bring an unfair dismissal claim.
The contractor high-income threshold has also increased to $190,100 from 1 July 2026. A contractor earning above this amount cannot apply to the Fair Work Commission for an unfair contract terms remedy (and, for regulated workers, unfair deactivation or termination).
The maximum amount of compensation payable for a successful unfair dismissal claim is capped at the lower of:
- the amount of remuneration received by the employee (or the amount the employee was entitled to receive, whichever is higher) in the 26 weeks before the dismissal; or
- for dismissals that occur on or after 1 July 2026, half the amount of the high-income threshold immediately before the dismissal (that is, $95,050).
From 1 July 2026, parental leave pay for eligible employees under the government scheme has increased to 130 days at the national minimum wage for families with children born or adopted from that date.
Key Takeaways for Employers
Several significant changes to employment matters came into effect from 1 July 2026. In light of the recent changes, it is recommended that all businesses:
- Assess eligibility and compensation matters in relation to any dismissal against the increased thresholds for any dismissals occurring on or after 1 July 2026; and
- Review their contractor and parental leave arrangements to ensure compliance with the new legal requirements.
If you require legal advice or assistance, please contact our Harmers team at +61 2 9267 4322.
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Disclaimer: This legal update provides a summary only of the subject matter covered without the assumption of a duty of care by the firm. No person should rely on the contents as a substitute for legal or other professional advice.
