Proposal, not law
If your employment contracts have a non-compete clause anywhere in them, the government just released the draft law that would make most of them unenforceable. It isn't law yet. But the direction is clear enough that waiting for royal assent before you look at your contracts would be leaving it too late.
On 7 September 2026, the Minister for Employment and Workplace Relations released draft legislation to ban non-compete clauses for most employees. It's the next step in a reform the government first flagged in 2024, and it's now detailed enough to act on, even though it's still open for consultation.
This isn't a Fair Work Commission decision or an award change. It's a proposed change to competition and workplace law, and it would touch a much wider range of businesses than the SCHADS or health sector changes we've covered recently: anyone with a manager, salesperson or specialist on a restraint clause.
What's actually being proposed
The core change: a ban on non-compete clauses for employees earning under the Fair Work Act high income threshold, currently $190,100 a year (this figure is indexed every 1 July, so it moves). Above that threshold, non-competes could still be used, though the detail of how that would work is still being settled.
The government is also consulting on a wider set of restraints in the same reform: clauses stopping an employee soliciting former co-workers, no-poach arrangements between businesses, wage-fixing arrangements between businesses, and "cascading" restraint clauses (where a series of overlapping restrictions are stacked to extend how long or how broadly an employee is restricted). None of that is settled yet. It's earlier-stage consultation than the core non-compete ban.
Why the threshold matters more than the headline
Most coverage of this reform leads with "non-competes are being banned." That's true for the majority of the workforce, but not for anyone earning above $190,100. If you've got senior leaders or specialists on higher packages with a restraint clause, that clause isn't automatically dead. It's the people below that line, team leaders, coordinators, tradespeople, most professional and administrative roles, where a non-compete clause would very likely become unenforceable if this passes as drafted.
What to do while this is still a draft
Find every restraint clause in your contract templates and individual contracts now. Don't wait for the bill to pass to know what you're carrying.
Sort them by salary. Anyone under $190,100 with a non-compete clause is the group this reform is squarely aimed at. That's where your exposure sits if the draft becomes law largely unchanged.
Don't rewrite contracts yet. The consultation closes 2 October 2026 and the detail, including transition arrangements for existing contracts, isn't settled. Rewriting now risks doing it twice.
Shore up what actually protects you. Confidentiality obligations and IP assignment clauses aren't part of this reform. If a non-compete has been doing the job those clauses should be doing, that's worth fixing regardless of what happens to this bill.
Watch the second-stage consultation, not just the headline ban. Non-solicitation and no-poach reform could land later and separately, and it's easy to miss if you only track the non-compete story.
Where to check the latest position
This is current as at 10 September 2026, and it's a moving target. The consultation on the draft legislation closes 2 October 2026, and commencement (targeted for 2027) depends on the bill passing Parliament in some form after that. The Fair Work Ombudsman's high income threshold page is the place to check the current dollar figure, since it's indexed annually: Fair Work Ombudsman: high income threshold amounts. For the government's own announcement of the draft legislation, see the Minister for Employment and Workplace Relations' media release.
Current as at 10 September 2026. This is general information about a government policy proposal, not advice about your contracts or your situation. If you want a hand auditing your restraint clauses before this becomes law, that's exactly the sort of thing we do.
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Disclaimer
This article is general information only. It doesn't take into account your specific circumstances and isn't a substitute for professional legal or HR advice. We make every effort to keep our Insights accurate and current, but award rates and Fair Work Commission decisions can change, and we can't guarantee this information is complete or up to date at the time you're reading it. Nothing on this page should be relied on as legal advice, and nothing here forms part of a professional engagement with happy humans.