Aged Care Sector FWO Enforcement Action
- Apr 9
- 8 min read
The aged care sector has become one of the Fair Work Ombudsman's most active enforcement priorities. With over $40.5 million recovered for more than 22,000 workers in a single financial year, a wave of Enforceable Undertakings signed by major providers, and an active proactive investigation underway, no aged care organisation can afford to treat payroll compliance as a back-office afterthought.
Background: Why Aged Care Is a Priority Sector
The Fair Work Ombudsman (FWO) has identified the aged care sector as a sustained enforcement priority — and for good reason. The sector employs a large proportion of vulnerable workers, including a significant number of visa holders and migrants, and operates under a complex web of modern awards and enterprise agreements. The Aged Care Award 2010, the Nurses Award 2020, and the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) each cover different categories of workers, and each has been the subject of significant rate increases in recent years.
Layered on top of this complexity are the historic wage increases flowing from the Aged Care Work Value Case — increases of up to 28.5% for personal care workers, assistants in nursing and home care workers that have been phased in from 1 January 2025, with further tranches in October 2025 and August 2026 for nurses. Keeping payroll systems aligned with these rolling changes has proven difficult for even well-resourced organisations.
"Hard-working aged care workers must be paid all that they are owed under their awards, agreements and the Fair Work Act's National Employment Standards"
— Fair Work Ombudsman Anna Booth, April 2025
The Proactive Investigation: 20 Organisations, Five States
In February 2025, the FWO commenced a targeted proactive investigation into 20 aged care organisations across Victoria, New South Wales, South Australia, Queensland and Western Australia. The investigation covers 27 sites spanning both metropolitan and regional areas and involves a mix of residential aged care providers, home care organisations, and digital platforms that facilitate home care workers.
Fair Work Inspectors have been conducting site visits (including without advance notice), undertaking interviews with both workers and management, and requiring production of payroll records and other documents. Providers selected for investigation were identified based on a range of factors including previous non-compliance history, anonymous reports from staff members, employment of visa holders, or simply to test compliance in specific regions or service delivery models.
The investigations focus on:
Pay and entitlements for personal care workers, nurses, and nursing assistants;
Overtime, penalty rates (including weekend and shift penalties), and allowances;
Final entitlements on termination; and
Record-keeping obligations, with specific attention to the classification and rate changes effective from 2025.
The FWO has noted that it will publish a report setting out its findings upon completion of the investigation. Where significant non-compliance is identified, formal enforcement action — including Enforceable Undertakings, compliance notices, or litigation — is squarely on the table.
A Sector with a Long Enforcement History
The 2025 investigation builds on a substantial enforcement record stretching back over a decade. The table below summarises the major Enforceable Undertakings and self-reported remediation programs in the sector since 2015.
Organisation | Issues Identified | Amount / Employees | Year / Outcome |
Southern Cross Care (NSW & ACT) | Overtime, weekend penalties, shift loadings and annual leave loading underpaid due to a faulty time & attendance system and a manual payroll process inconsistent with enterprise agreement requirements | $11,771,825 (incl. interest and super) to 5,500 current and former employees | Self-reported Nov 2023; EU signed Apr 2026 |
Southern Cross Care (Tasmania) | Overtime underpaid to part-time staff who worked additional hours without written agreements in place; also underpaid wages for ordinary hours, weekend and public holiday penalty rates, paid meal breaks, shift penalties and allowances including sleepover allowance (2015–2022) | $6,874,528 (incl. $5,806,756 wages/entitlements, $313,591 super, $754,181 interest) to 1,708 current and former employees | Self-reported Aug 2021; EU signed Sep 2023 |
Bupa Aged Care Australia | Systemic underpayments identified across 28 enterprise agreements and modern awards; specific issues not detailed in public reporting — independent pay review ongoing (from July 2014) | Up to $75M to approximately 18,000 current and former employees | Self-reported Dec 2021; remediation ongoing — no EU on public register |
Regis Healthcare Ltd | Employee entitlements recorded inaccurately in payroll system | Estimated $30M–$40M | Self-reported to FWO Aug 2021; remediation ongoing — no EU on public register |
Silver Chain Group Ltd | Overtime underpaid when changes to scheduled shifts were not reflected in pay; employees also underpaid paid tea breaks, and unpaid gaps between client appointments were improperly treated as unpaid breaks; superannuation also underpaid (2013 - 2021) | $17M+ (incl. super and interest) to more than 2,300 current and former employees | Self-reported Sep 2020; EU signed Jul 2022 |
St Vincent's Health Australia | Misapplication of service allowance and leave loading for private hospital employees; non-payment of overtime for casual nurses; failure to credit additional annual leave entitlements for shift workers in aged care (2014 - 2020) | $4.4M+ (incl. ~$400K specifically for QLD aged care workers) | Self-reported Jul 2021; EU signed Dec 2023 |
RSL LifeCare Ltd | Overtime underpaid where employees lacked sufficient breaks between shifts or part-time employees worked rostered days off; shift workers not provided an extra week of annual leave; some employees underpaid weekend penalty rates; payroll and rostering system setup errors (2010–2021) | $5.1M+ (incl. super and interest) to more than 3,591 current and former employees in nursing and management roles across aged care facilities and home care programs in NSW and ACT | Self-reported 2021; EU signed Dec 2022 |
Calvary Administration Pty Ltd | Sunday penalty rate under a new enterprise agreement not applied to any relevant worker (Apr 2018–May 2020); FWO review also identified underpayments of annual leave loading under the Victorian EA and lump-sum parental leave entitlements under five agreements; VIC, NSW, SA, TAS | $2,103,617 (incl. super and interest) to 2,800 current and former employees | Self-reported Jul 2020 (as Japara Administration); EU signed Oct 2023 |
Australian Unity Ltd | Penalty rates, minimum engagements, overtime, travel time, higher duties, leave accruals and superannuation underpaid across Independent and Assisted Living businesses; caused by system and set-up errors, rostering and manual processing errors, incorrect interpretation of obligations, and inadequate training (2014 – 2021) | $6,851,391 (incl. super and interest) to more than 8,500 current and former employees; EU also required $250,000 contrition payment to Commonwealth Consolidated Revenue Fund | Self-reported Nov 2020; EU signed Dec 2022 |
Uniting AgeWell Ltd | Overtime underpaid where employees had insufficient rest breaks between shifts or worked more than 76 hours in a fortnight; errors in rostering and incorrect interpretation of enterprise agreements; penalty rates and allowances not correctly applied (2015 – 2021) | $3.5M+ (incl. $127,640 super) to 4,224 current and former employees; | Self-reported Sep 2021; EU signed May 2023 |
Apollo Health Ltd | Minimum rates, overtime, penalty rates, allowances, annual leave and annual leave loading underpaid under modern awards and the NES; payroll issues not identified when St John WA acquired Apollo Health in 2016; inadequate time recording (2013 – 2021) | $4.86M+ (incl. super and interest) to 438 current and former employees | Self-reported Nov 2021; EU signed Jul 2023 |
What Enforceable Undertakings Require
When the FWO enters into an Enforceable Undertaking with an organisation, the obligations typically go well beyond simply repaying employees. Based on the aged care EUs executed to date, providers have been required to:
Remediation
Back-pay all affected employees, together with superannuation and interest on outstanding amounts.
Independent Audits of Remediation Program
Appoint an independent auditor to verify the accuracy and completeness of remediation, with reports provided to the FWO.
Systems Overhaul
Replace or overhaul time, attendance and payroll systems identified as root causes of underpayment — at the provider's cost.
Training & Governance
Implement workplace relations training programs for payroll and HR staff, with periodic reporting to the FWO on compliance.
Worker Voice Mechanisms
Some EUs require union consultation obligations and the establishment of service desks or hotlines for staff to raise pay queries.
Ongoing External Audits
Multi-year reporting obligations, often including external auditors undertaking comprehensive payroll audits for 1, 2 or 3 years post-EU, to demonstrate sustained compliance.
The reputational and operational consequences of entering into an EU should not be underestimated, particularly the impact of ongoing external audits which require signifigant internal resources to manage and respond to.
Breach of an Enforceable Undertaking is itself an offence — and can be enforced in court and can attract large penalties.
Common Causes of Non-Compliance
The FWO has consistently identified the same cluster of root causes across the aged care enforcement actions it has taken:
Payroll system misconfiguration
The most pervasive issue. Enterprise agreements and modern awards require application of complex rules that many payroll systems are not correctly configured to apply, including broken shifts, overtime cascades, penalty rate thresholds and allowance triggers. Errors or ommissions introduced at system implementation can compound silently over years before discovery.
Failure to update systems following EA or award changes
Each new enterprise agreement, award update, minimum wage ruling and work value increase requires corresponding updates to payroll system rules. The scale of the recent Aged Care Work Value Case increases — phased across 2025 and 2026 — creates particular risk for providers who have not kept pace.
Inadequate record-keeping
Deficient records make it difficult for employers to demonstrate compliance and for employees to identify underpayments. Record-keeping obligations are enforceable in their own right (and can create a 'reverse burden of proof' for employers) and are a focus of the current FWO investigation.
Part-time employee arrangements
Several EUs (including Southern Cross Care Tasmania) have involved failure to pay overtime to part-time employees working hours beyond their rostered hours. The applicable modern award and EA provisions in this area are often misunderstood or unapplied.
The Sector's Structural Compliance Challenge
It is worth acknowledging the structural difficulty facing aged care providers. The sector operates under multiple overlapping instruments; different awards and enterprise agreements covering registered nurses, enrolled nurses, personal care workers, and home care workers, and must now navigate the phased rate increases from both the Aged Care Work Value Case and the annual wage reviews. For organisations operating at thin margins with significant operational complexity, keeping payroll configurations current is genuinely demanding.
This context does not excuse non-compliance, but it does explain why even organisations that have invested in payroll infrastructure have found themselves self-reporting wage underpayments.
Self-reporting and prompt remediation remains a significant mitigating factor in the FWO's enforcement approach. The enforceable undertakings entered into by major providers are, in most cases, the result of voluntary disclosure, and the FWO has consistently acknowledged this in its media releases.
The establishment of the Aged Care Services Reference Group, a standing body comprising the FWO, Ageing Australia, the Health Services Union, the ANMF and the United Workers Union, reflects the FWO's view that sector-wide compliance requires a collaborative as well as regulatory approach. Nonetheless, regulatory patience has its limits: the current proactive investigation signals that the FWO is prepared to use its full complement of enforcement tools.
Key Considerations for Aged Care Providers
Review payroll system configurations against current award and EA rates, including the 2025 and 2026 tranche increases from the Aged Care Work Value Case.
Review part-time employee records to confirm overtime entitlements are being applied correctly when additional hours are worked.
Check allowance payments against applicable award or EA provisions. Broken shift, length-of-service, and shift loading allowances are commonly missed.
Assess record-keeping practices. The FWO will examine these closely during the current investigation; deficiencies can attract separate enforcement action.
If non-compliance is identified, take prompt action and obtain legal advice.
Consider implementing regular payroll assurance reviews, particularly at key junctures such as implementing a new payroll system, a new enterprise agrement or when awards are updated.
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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