Childcare workers scrap plan to walk off job as pay scheme extended

The federal government has agreed to extend its subsidy for childcare worker wages by 18 months. (Pixabay)

Childcare workers will no longer walk off the job in July because the federal government has agreed to fund a 15 per cent pay rise for an additional 18 months.

The scheme, which affects the wages of 200,000 early educators, would have ran out in November.

A Fair Work Commission decision on gender-based undervaluation means childcare workers will get a permanent pay rise funded by employers in 2029.

Childcare workers have scrapped a plan to walk off the job in July after the federal government agreed to fund a 15 per cent pay rise for another 18 months at a cost of $3.6 billion.

The wage rise was initially funded in 2024 and applied to the pay packets of about 200,000 early educators, but it was due to run out in November.

The most recent federal budget in May did not clarify the scheme's future, infuriating the United Workers Union (UWU), which represents childcare workers.

The federal government had hoped a judgment from the Fair Work Commission to raise wages in female-dominated industries would kick in, forcing the private sector to pay for the wage rise.

Early childhood operators say increased load on educators is taking a "huge toll" on their mental health and safety.

But the commission delayed the rollout of the wage increase because of concerns from employers, who said they would struggle to take on the cost.

The Australian Childcare Alliance said daycare fees would shoot up unless the government extended its wage subsidy, warning providers would be faced with the choice to either hike fees for families or cut wages and risk losing staff.

UWU national president Jo Schofield said the announcement made the pay rise essentially permanent by bridging the gap until the Fair Work Commission enforced the gender undervaluation pay rise in full in 2029.

"Early educators know only too well what the sector was like before this pay rise came into force in December 2024, and there was no way they were going backwards," she said.

The additional funding will cost taxpayers $3.6 billion over 18 months and be paid on the condition that early childhood centres meet the National Quality Standard.

For-profit providers have been accused of putting growth and revenue ahead of quality care in a report.

Centres will also be required to limit fee increases for families, just as they were when the scheme was announced in 2024.

The wage increase will be offered to employees working at family daycare at residential properties for the first time.

The gov