Employment lawyer says underpayments rarely stem from a conscious decision by employers to short-change staff
External factors and increasingly complex enterprise agreements are causing non-compliance in Australia's disability support services sector, where several employers have been hit with underpayment controversies recently.
This is according to Fay Calderone, partner at Hall & Wilcox, who pointed out that the sector operates within one of the "most intricate employment landscapes."
"Providers are balancing the demands of delivering essential care around the clock while managing large, geographically dispersed workforces, complex rostering arrangements, funding pressures, the SCHADS Award and increasingly complex enterprise agreements," Calderone told HRD Australia.
"In an environment where every shift, classification and progression point matters, seemingly routine payroll processes can become significant compliance risks if the underlying systems, controls and oversight are not functioning as they should."
Calderone made the remarks as Sunnyfield, a disability services provider, signed an Enforceable Undertaking (EU) with the Fair Work Ombudsman (FWO) in October 2026 after underpayments of about $5.43 million affecting more than 1,700 workers.
It follows an EU signed by disability services provider Yooralla in July 2026, after it also underpaid more than 1,300 former and current workers about $2.05 million.
The sector is already a "priority area" for the FWO, which last year launched an inquiry into the sector's compliance with workplace laws.
"We have serious concerns about workplace compliance in the disability support services sector," Fair Work Ombudsman Anna Booth said in July 2025. "The time is right to look at how we can boost compliance with workplace laws and ultimately drive systemic change."
A 'governance issue' in workplaces
Calderone, citing her experience, noted that underpayments in the sector rarely stem from a conscious decision to short-change workers.
"More often, they emerge quietly through gaps in payroll governance that accumulate over time," she said. "Entitlements linked to classification levels and pay progression often operate behind the scenes, and without regular scrutiny of payroll outputs and workforce data, errors can remain hidden for years."
Calderone said the FWO's investigations across the sector underscore that payroll compliance has become a "governance issue" in workplaces.
"What is becoming increasingly clear from Fair Work Ombudsman investigations across the disability and community services sector is that payroll compliance is no longer viewed simply as an operational or HR responsibility. It is a governance issue," she said.
"For provider organisations, where boards are often made up of dedicated non-executive and volunteer directors, the challenge is heightened."
What do employers need to do?
According to Calderone, what employers can do amid the ongoing FWO inquiry is carry out a "thorough payroll health check."
"That means examining award classifications and pay progression practices, stress-testing payroll systems, reviewing enterprise agreement interpretation and ensuring employees have clear pathways to raise concerns about their entitlements. Where issues are identified, organisations should act decisively," Calderone said.
"The Fair Work Ombudsman has consistently recognised early self-reporting, cooperation and genuine remediation as important factors in its enforcement approach."
Calderone also stressed the need to treat payroll compliance as an ongoing responsibility instead of a periodic exercise undertaken every few years.
"It requires constant attention, independent challenge and active oversight from leadership. Organisations that invest in finding and addressing issues early are not simply reducing legal risk; they are strengthening trust with their workforce and protecting the integrity of the services they provide," she said.
"Invariably, the cost of prevention is far less than the financial, regulatory and reputational consequences of discovering systemic underpayments years down the track."
