Changes to Sleepovers in the SCHADS Award: Effective 1 June 2026
- May 12
- 7 min read
Updated: 3 days ago
Following years of contested interpretation, the Fair Work Commission has finalised new rules for how sleepover shifts are rostered and paid. Here is what employers in the community, disability, aged care and home care sectors need to know.
The Fair Work Commission (FWC) has varied the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) to resolve long-standing uncertainty about how sleepover shifts are structured and paid. The changes take effect from the first full pay period on or after 1 June 2026.
If your organisation employs workers who stay overnight at client premises — in disability support, community services, aged care, home care, or residential care — these changes will require attention to rosters, payroll systems and employee agreements before the commencement date.
How did we get here?
The treatment of sleepover shifts under the SCHADS Award has been contested for years. The central question is whether an employee who works before a sleepover, stays overnight at a client's premises, and then works again in the morning is working one continuous shift or separate engagements.
The answer has significant consequences for penalty rates, overtime thresholds and shift allowances. For many years the Fair Work Ombudsman (FWO) maintained that the sleepover and surrounding work formed a single continuous shift, meaning night shift penalties would commonly apply. The Jats Joint litigation challenged that position directly.
November 2023: FWO issues compliance notice to Jats Joint
The FWO issued a compliance notice on Jats Joint, a disability support provider, alleging failure to pay a 15% night shift loading to a part-time support worker rostered on 123 sleepover occasions, on the basis that the sleepover and surrounding work constituted a single continuous shift.
July 2025: Federal Court rules in favour of Jats Joint
Jats Joint filed an application in the Federal Court for a review of the compliance notice. The Federal Court in Jats Joint Pty Ltd v Fair Work Ombudsman [2025] FCA 743 agreed with Jats Joint and found that sleepovers are separate and distinct from ordinary shifts and do not automatically trigger night shift penalties. This directly contradicted the FWO's longstanding guidance and created immediate uncertainty across the sector.
August 2025: FWO appeals the decision
The Fair Work Ombudsman filed a notice of appeal, prompting the FWC to commence its own award variation proceedings to address the continuing ambiguity
March 2026: FWC issues decision to vary the SCHADS Award
The FWC issued its decision, introducing a new framework for sleepover shifts that aligns broadly with the Jats Joint findings while introducing additional employee protections.
March 2026: Full Court dismisses FWO appeal
The Full Federal Court confirmed that under the current Award wording, a sleepover is a separate period that does not form part of a shift.
1 June 2026: Varied Award provisions take effect
The FWC's final determination comes into force from the first full pay period on or after 1 June 2026.
Note: Retrospectivity
The FWC rejected any retrospective application of the varied provisions. The new rules apply on a prospective basis only from 1 June 2026. Providers are not required to recalculate historical pay records under the new framework. The Jats Joint decision may, however, be relevant to assessing compliance under the existing Award provisions for prior periods.
What is changing?
The FWC's decision resolves ambiguity around sleepover shifts through four substantive changes to the SCHADS Award.
Single shift treatment: Where an employee is rostered to work immediately before and after a sleepover, both periods of active work must be treated as part of the same single shift. Providers cannot treat them as two separate shifts.
Sleepover is not a rest break: The Award requires a break of not less than 10 hours between the end of one shift and the start of another. The Award is now varied to make clear that a sleepover period does not satisfy this requirement. The 10-hour break entitlement is preserved.
Shift allowances assessed separately: Although the sleepover arrangement constitutes a single shift, the pre-sleepover and post-sleepover portions of work are assessed independently for the purposes of determining shift allowances. Different loadings may apply to each portion depending on the hours worked.
New extended shift — up to 12 hours: By agreement with the employee, a sleepover shift can now involve up to 12 hours of total active work (excluding the sleepover itself), up from the current 10-hour ordinary hours cap. No more than 8 ordinary hours may be rostered on either side of the sleepover. Overtime applies for active hours beyond 12.
Overtime for part-time and casual employees: Overtime for part-time and casual employees will be payable whenever an employee works more than 10 hours per shift or more than 10 hours per day (except where an extended sleepover shift has been agreed). Currently, overtime is calculated on a per-day basis for part-time and casual staff. This change may therefore trigger additional overtime entitlements, depending on working patterns.
How do shift loadings apply under the new rules?
The separate assessment of each portion of the shift for allowance purposes is where most practical complexity will arise. The SCHADS Award's definitions of shift types remain unchanged:
Afternoon shift: a shift finishing after 9 pm and at or before midnight, Monday to Friday.
Night shift: a shift finishing after midnight or commencing before 6 am, Monday to Friday.
The pre-sleepover period of work is assessed on its own start and finish times. The post-sleepover period is assessed separately. A shift that previously attracted a night loading across the entire arrangement may now attract only an afternoon loading for the pre-sleepover portion, and no loading at all for the post-sleepover portion if the employee recommences work after 6 am.
Worked Example — Shift Allowances
Marty's weeknight sleepover shift
9:00 pm | Marty commences work — providing evening support to client |
11:00 pm | Sleepover commences — Marty stays overnight at client premises; compensated at the sleepover allowance rate |
6:00 am | Sleepover concludes — Marty resumes active work |
10:00 am | Marty finishes work |
Previous Treatment
Previously, under the FWO's interpretation that the whole arrangement was a single continuous shift, Marty's entire shift (9:00pm - 10:00am) may have attracted a night shift loading.
New Framework
Under the new framework, each period is assessed independently. Therefore:
Pre-sleepover work (9 pm–11 pm): The shift finishes after 8 pm and before midnight — an afternoon shift allowance applies to this portion.
Post-sleepover work (6 am–10 am): The shift commences at or after 6 am and does not finish after midnight — no shift loading applies to this portion.
The new 12-hour extended sleepover shift
Many services — particularly youth residential care and high-support disability services — rely on having the same support worker present in the evening and the following morning. The current ordinary hours cap can create operational challenges for those service models.
The FWC has introduced a new option. By agreement with the employee, a sleepover shift can now consist of up to 12 hours of active work (excluding the sleepover itself), subject to the following conditions:
Employee agreement is required — the arrangement cannot be imposed unilaterally by the employer.
12-hour cap on total active work — active working hours before and after the sleepover combined cannot exceed 12 hours.
8-hour cap per side — no more than 8 ordinary hours may be rostered on either the pre-sleepover or post-sleepover portion of the shift.
Overtime threshold — where total active hours exceed 12, overtime rates apply for any additional time worked.
Employees and employers can already agree to extend ordinary hours to 10 hours per shift under the current Award. The new 12-hour option is available specifically where the shift includes work immediately before and after a sleepover period.
Who is affected?
These changes apply to all employers covered by the SCHADS Award who engage employees on sleepover shifts, including:
Disability service providers (NDIS and non-NDIS funded)
Community services organisations
Home care (including aged care at home) providers
Youth and residential care services
Mental health support and crisis accommodation services
Organisations covered by an enterprise agreement should review their EA provisions carefully. Where an EA references or incorporates the SCHADS Award sleepover provisions, the varied Award terms may affect the operation of those provisions.
What should employers do before 1 June 2026?
Review current sleepover rostering arrangements. Identify how sleepover shifts are currently structured and determine whether any arrangements involve treating pre- and post-sleepover work as separate shifts. Assess the impact of the new single-shift requirement on those arrangements.
Update payroll systems. Payroll systems will need to be configured to assess pre- and post-sleepover periods separately for shift allowance purposes, while aggregating total active hours within the single shift for overtime calculation.
Determine whether extended shift agreements are needed. If your service model requires more than 10 hours of active work across a sleepover shift, individual employee agreements will be required under the new provisions. Review roster designs and consult with affected employees before 1 June.
Communicate with the workforce. Affected employees should be briefed on what is changing and when. Employee representatives should be involved where applicable. Employment contracts and letters of engagement may also require updating to reflect any changes to shift arrangements.
Review enterprise agreement provisions. Obtain advice on how the varied Award provisions interact with any applicable enterprise agreement — particularly provisions dealing with sleepovers, shift allowances, rest breaks and overtime.
Consider historical compliance exposure. The new rules are not retrospective. However, the Jats Joint decision — now confirmed on appeal — is relevant to the interpretation of the current Award and may affect the assessment of prior pay practices. Where historical compliance is uncertain, legal advice should be sought before any self-disclosure or engagement with the FWO.
Key Points at a Glance
Changes take effect from the first full pay period on or after 1 June 2026.
Work before and after a sleepover now forms a single shift — not two separate engagements.
However, shift allowances are assessed separately for each portion of work either side of the sleepover.
A sleepover period does not satisfy the rest break requirement between shifts.
By employee agreement, total active hours per sleepover shift can extend to 12 hours (maximum 8 hours per side).
The changes are not retrospective — no requirement to recalculate historical pay.
Employers under enterprise agreements should review EA provisions for compatibility with the varied Award.
If you would like to know more about the issues raised in this article, or wish to discuss any employment law issues, please contact us.
This is commentary published by Makeham Flaherty for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories.
Makeham Flaherty 2025.
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