Are your workforce and payroll system ready for 1 October 2026?

From the first full pay period starting on or after 1 October 2026, new classifications and minimum pay rates will apply to health professionals covered by the Health Professionals and Support Services Award 2020 (HPSS Award). This is more than a standard pay-rate update.

Employers will need to reclassify all impacted employees by reviewing standard minimum qualification (an Australian Qualifications Framework (AQF)) levels, years of experience in the relevant profession, and duties performed. This must occur before confirming an employee’s pay rate from 1 October 2026 and updating payroll systems. Ensuring that all relevant information is available is crucial, as incorrect classification may lead to the risk of underpayment.

In this article, we highlight the key changes and how HPSS Award covered businesses can ready themselves for the changes that will occur from 1 October 2026.

The Fair Work Commission’s Expert Panel found that minimum rates for health professionals under the HPSS Award had been subject to gender-based undervaluation as part of a broader Gender-Based Undervaluation – Priority Awards Review that commenced in 2024.

Some changes to the HPSS Award impacting dental assistants and pathology collectors commenced from 1 April 2026.

Broader changes proposed to address gender undervaluation in the professional stream of the HPSS Award were addressed by the Commission in a decision handed down in May 2026¹,  including:

• a new classification structure, amending Schedule A of the Award, tied to AQF qualification levels and an employee’s years of experience in their profession (including with other employers) set out in an amended Schedule B;
• the first of five phased increases to minimum rates (varying by profession) from the first full pay period starting on or after 1 October 2026;
• the remaining increases to apply from 30 June in each year from 2027 to 2030; and
• the requirement for professional casual and part-time employees to progress classification after working 1,824 hours has been removed.

These changes represent a shift from generic pay point levels (Level 1 to 4), built around years of service and broad duties.

Base rates for the first phase are set out in the Commission’s May decision, and are to be updated to reflect the Annual Wage Review increase that applied from the first full pay period on or after 1 July 2026. However, classification mapping should be underway now, with rates applied once published.

Under the new classification structure, Level 1 applies broadly across health professions (such as physiotherapists and speech pathologists) and is anchored to the AQF level of the profession’s standard minimum qualification (set out in a new Schedule B). Progression is based on years of experience in the profession, not tenure with the current employer. Classification Levels 2 to 4 are defined by an employee’s substantive role and the work performed, covering roles such as Senior Clinician, Specialist, Supervisor or Educator, Advanced Clinician, Senior Specialist, Section Manager and Manager. These are new higher classifications, which recognise increasing levels of specialist expertise, clinical responsibility, supervision, leadership and management. Employers need to look beyond job titles and carefully assess the scope, complexity and level of responsibility of each employee’s day to day work in practice when assessing classification within the new framework.

Existing employees must not be disadvantaged as a result of the changes. Where an employee’s minimum rate in their classification as of 30 September 2026 is higher than the rate in their translated (new) classification, the employee must continue to be paid the higher, retained rate. This will require a comparison at each increase date from 1 October 2026 to ensure that an employee’s rate of pay is the higher of the retained or Award minimum rate in the new structure.

Employers with health professionals covered by enterprise agreements should also consider the impact of HPSS Award changes. This is because an employee’s base rate under an enterprise agreement cannot be lower than the base rate of pay under the modern award that would otherwise apply to the employee. Where an enterprise agreement rate is lower, the employee is entitled to receive at least the minimum award base rate (see s.206 of the Fair Work Act 2009 (Cth) (FW Act)). Employers should check enterprise agreement classification structures against new HPSS Award changes and also take these changes into account in proposing new enterprise agreement terms.

The HPSS Award covers employers in the health industry, i.e., employers whose business and/or activity is in the delivery of health care, medical services and dental services, and their employees who fall in support services or professional classifications covered by the HPSS Award. The 1 October 2026 changes impact employees in the professional classification stream of the HPSS Award, including dietitians, physiotherapists, pharmacists, medical imaging technologists and mental health professionals such as counsellors, social workers and psychologists.  A more comprehensive list of common health professionals covered by the HPSS Award is set out in the revised Schedule B to the HPSS Award.

Whilst this article focuses on HPSS Award Changes, the Commission’s review of gender-based undervaluation also impacts other awards. On 1 June 2026 the Commission also finalised its decision on the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award).  The outcome will reshape classifications and minimum rates for affected SCHADS employees, including a single classification structure currently scheduled to replace four existing schedules from 1 October 2027 and a proposed earlier wage adjustment from 1 October 2026 for some home care employees engaged in disability care.

There are a number of critical actions that employers can undertake now to ensure adequate compliance when the changes go live on 1 October 2026.

• Identify affected employees. List all health professionals covered by the HPSS Award and gather evidence of their qualifications and the AQF level, years of experience in the profession (not just with your organisation) and current duties performed.
• Determine each employee’s classification from 1 October 2026. Use the new classification criteria and the transition tables in the HPSS Award (published by the Commission) to classify each employee at the correct level.
• Update payroll systems and test before October. Payroll systems may need to be updated with the new classification codes, pay points and minimum rates. Systems should have capacity to confirm "higher of” retained rate requirements referred to above. Employers should also run pilot tests to confirm that any changes flow through correctly to allowances, penalties, overtime, leave payments and superannuation calculations before the first affected pay period.
• Update employment records. Review and update employment contracts, offer letters and position descriptions as needed to ensure they accurately reflect each employee’s new classification and the duties they perform.
• Communicate with employees. Tell each affected employee about their new classification, explain how it was determined and confirm the pay rate that will apply.
• Keep clear records. Retain qualification and experience evidence, and the reasons for classification decisions. These records may be important if a decision is later questioned.

A classification error can create an underpayment in every pay cycle. Over time, even a small error can become a significant liability.

Intentional underpayments, or failing to address known compliance risks, can expose employers to significant penalties, including criminal penalties under the FW Act. Employers should therefore treat the reclassification as an important compliance project with clear ownership and documented decisions, rather than simply an administrative payroll update.

The go-live date of 1 October 2026 is fast approaching.  Employers should act now to collect employee information, make and document considered classification decisions, configure and test systems, and communicate with employees. Being clear about the new classification system allows the cost of the phased increases through to 2030 to be built into forecasts rather than absorbed at short notice.

Need help getting ready? PwC’s Workplace Law and Workforce teams can help you identify affected employees, map them to the new classifications, update payroll settings and test your approach before the first affected pay run. Contact us now to reduce underpayment risk and make the 1 October transition smoother for your organisation.