Aged care sector under fire: Fair Work Ombudsman launches investigations
In a continued effort to prioritise improving compliance in the aged care sector, the Fair Work Ombudsman (“FWO”) has launched investigations into 20 aged care organisations across the country to ensure staff are being correctly remunerated.
In 2023 – 2024, the FWO recovered over $40.5 million in respect of over 22,000 aged care workers in residential aged care.
Further, 12% of all the anonymous reports to the FWO were from workers in the health care and social services sector.
Scope of the investigations
The FWO has inspected and conducted interviews with staff and management across a mix of residential aged care providers, home care organisations and digital platforms that provide home care workers in Victoria, South Australia, Queensland, New South Wales and Western Australia.
The investigations focus on pay and entitlements for personal care workers, nurses, and nursing assistants, being staff providing direct care to older people in their homes and at residential aged care facilities. Record-keeping is also being considered.
While the investigation is ongoing and no findings have been published, the FWO has noted that the common non-compliance issues aged care workers contact the FWO about relate to the underpayment of base rates of pay, non-payment for overtime and penalty rates, missed allowances and incorrect payments of final entitlements on termination of employment.
Key takeaways to protect aged care providers from FWO scrutiny
The industrial instruments which typically apply to aged care providers are complex and this is leading to payroll errors and underpayments.
In light of the FWO’s increased scrutiny on the aged care sector, aged care providers should:
Review compliance with applicable enterprise agreements and/or modern awards with a heightened focus on overtime, penalty rates and allowances. Further, ensure record keeping systems and processes are compliant.
Stay across changes to awards and update systems accordingly (importantly, from 1 January 2025, changes were made to classifications and increasing minimum rates of pay in certain awards that apply to the aged care sector).
Conduct regular pay reviews. This will ensure that aged care providers are compliant, and any instances of non-compliance are fixed before they get out of hand.
If non-compliance is identified, take prompt action which may include obtaining legal advice, remediating underpayments and engaging with the FWO.
Cowell Clarke is pleased to offer its RemCheck service to organisations that wish to obtain peace of mind by confirming their payroll compliance. Our Employment & Workplace Relations Team can also provide advice should you have any queries or concerns. Contact Cassie Burfoot, Director, or Emily Gray, Senior Associate, for further information.