Thousands of residential and commercial bins won't be collected in the City of Sydney, Randwick, Erskine Park and Silverwater, and Canberra on Tuesday.
Transport Workers' Union (TWU) NSW/Queensland secretary Richard Olsen says it's the fifth time workers have taken action this year over company plans to reduce penalty rates for weekend work.
The union wants the current enterprise agreement to be rolled over, with the same hours of work and conditions to ensure job security for waste workers.
"They're trying to introduce a B-grade group of people coming in here on lesser terms and conditions, more varied conditions, which will ensure that overtime is diminished for our members," Mr Olsen told ABC TV on Tuesday.
"They'll be lucky to get 38 hours a week of work, which will decrease the amount of take home pay for these workers," he said.
"We've got CPI going out of control, these guys can't afford to lose a few hundred dollars a week for the company to make more profit."
The action will leave 50,000 bins uncollected in the City of Sydney and Randwick for 24 hours and will also affect commercial contracts for major supermarket chains.
Cleanaway workers in WA last week voted to take action over the same issues, with the union negotiating team due to meet with company representatives on Tuesday to try to reach an agreement.
In a statement, a Cleanaway spokesman said the company supported the rights of workers to take protected industrial action and it was negotiating to reach a fair and reasonable enterprise deal for all parties.
"During this period we will continue to work hard to ensure there are minimal impacts to our affected customers and residents," he said.
"If services are missed on the scheduled day our teams will complete them in the following days."
