Dr Kelly said people who work two to three days a week depend on penalty rates to get by.

“A lot of jobs in our community are in the seasonal tourism and service industries. These are our lowest paid workers,” he said.

“I’m incredibly disappointed with the impact the decision will have on workers in Eden-Monaro.”

FWC president Iain Ross delivered the news on Thursday, saying jobs would likely grow as a result of the decision.

“The evidence of business owners and operators in these proceedings supports the proposition that the current level of Sunday penalty rates has led employers to restrict trading hours, reduce staff levels and restrict the services provided,” Justice Ross said.

Eden small business owner Graham White agrees that lower rates would help extend trading hours during peak periods.

“There’s at least 12 coffee shops in Eden fighting for business and rates can have a restriction,” he said.

Though cafes and restaurants are exempt from the rate deduction, Mr White could see the positives for small businesses in the area.

Full-time and part-time workers in retail will have their Sunday penalty rates dropped from 200 per cent to 150 per cent of their standard hourly rate, while casuals will go from 200 per cent to 175 per cent.

Hospitality employees will face a reduction in Sunday pay from 175 per cent to 150 per cent, while casual hospitality workers' pay will remain unchanged.

Fast-food employees' Sunday rates will go from 150 per cent to 125 per cent for full-time and part-time staff, and casuals will go from 200 per cent to 175 per cent.

Holiday penalty rates for full-time and part-time employees in hospitality and retail will also be slashed from 250 per cent, or "double-time and a half", to 225 per cent.

Most of the pay cuts take effect from July, and some will be phased in over time.