If you’re an aged care worker in Australia, you dedicate your life to caring for others. But are you being paid correctly for your vital work? Unfortunately, underpayment is a significant issue in the aged care sector. Understanding your rights, the modern award that covers you, and the powerful new laws coming in 2025 is crucial to ensuring you receive every dollar you’ve earned.
This guide explains what underpayment is, your rights under Australian workplace laws, and how Workstem’s all-in-one payroll & HR platform helps protect both employees and employers from costly compliance errors.
What is Underpayment?
An underpayment occurs when an employee does not receive their full legal entitlements. This isn’t just about base hourly rates; it includes failures to pay correct:
- Penalty rates (for evenings, weekends, and public holidays)
- Overtime
- Allowances (e.g., for uniforms, travel, or specific qualifications)
- Leave loading and other accrued entitlements
For aged care workers, underpayment often stems from the misapplication of the complex Social, Community, Home Care and Disability Services Industry Award 2010 (the SCHADS Award). Common causes include incorrect classification levels, missed overtime, and improperly calculated shift penalties.
Your Rights as an Aged Care Worker in Australia
Australian workplace laws provide a strong safety net. Your key rights include:
- The Correct Modern Award: Most aged care workers are covered by the SCHADS Award, which sets your minimum pay rates, hours of work, overtime, and penalty rates.
- The National Employment Standards (NES): These are 11 minimum entitlements for all employees, including maximum weekly hours, requests for flexible working arrangements, and various types of leave.
- A Detailed Payslip: You have a right to a payslip within one working day of payday, detailing your gross and net pay, hourly rate, hours worked, and any loadings or allowances.
- Back Pay for Errors: If an underpayment is discovered, your employer is legally obligated to back-pay you for the full amount owed, plus superannuation.
The Crackdown on Underpayments: New 2025 “Closing Loopholes” Laws
The Australian government is taking a much harder line on wage underpayment. The Closing Loopholes legislation introduces severe consequences for non-compliance, making it more critical than ever for employers to get payroll right.
Key changes include:
- Criminalisation of Intentional Underpayment: Knowingly underpaying employees will become a criminal offence, carrying the potential for significant fines and even jail time for the most serious cases.
- Higher Penalties: Courts will have the power to impose much larger fines on businesses that fail to meet their wage obligations.
- Strengthened Enforcement Powers: The Fair Work Ombudsman (FWO) will have greater resources and authority to investigate and prosecute wage theft.
These laws highlight that underpayment is not just an administrative error—it can be a serious legal breach.
What to Do If You Suspect You’ve Been Underpaid
If your payslip doesn’t seem right, take these steps:
- Check Your Entitlements: Review the SCHADS Award and compare it against your pay and employment contract. Tools like the Fair Work Ombudsman’s Pay and Conditions Tool can help.
- Speak to Your Employer: Raise your concerns internally first. It may be an honest mistake that can be quickly rectified.
- Contact the Fair Work Ombudsman: If the issue isn’t resolved, the FWO provides free advice and can investigate on your behalf.
- Seek Further Support: Organisations like JobWatch offer valuable resources and guidance on workplace rights.
How Workstem Prevents Underpayment for Aged Care Providers and Workers
For aged care providers, managing complex award interpretations manually is a high-risk activity. Workstem is a powerful payroll and workforce management solution designed specifically to eliminate these risks.
- Automated Award Interpretation: Our system automatically applies the correct SCHADS Award rules, including shift penalties, overtime, and allowances, calculating pay accurately every time.
- Real-Time Compliance Updates: As laws change—like the new 2025 wage legislation—Workstem’s platform is updated to ensure ongoing compliance, protecting your business from penalties.
- Transparent Payslips: Generate clear, detailed payslips that help employees understand their pay and build trust.
- Integrated Time & Attendance: Track complex rosters and hours worked seamlessly, feeding data directly into the payroll engine to minimise manual errors.
By automating compliance, Workstem allows aged care providers to focus on their core mission—providing excellent care—while ensuring their valued staff are paid correctly and on time.
You Deserve to Be Paid Fairly
Your work in aged care is essential and deserves to be valued fully through correct payment. Stay informed about your rights, understand the changing legal landscape, and know that technology like Workstem exists to support fair and accurate pay practices across the sector.
Ensure your pay is always accurate. Discover how Workstem’s automated payroll solution supports aged care providers and workers in Australia.
How Workstem Prevents Unpaid Wages
Automated Compliance Solutions
Simplify award interpretation and payroll processing with Workstem, the all-in-one workforce management & payroll software designed for every industry.
Our payroll compliance system ensures:
- Award Interpretation: Automatic application of correct rates
- Real-time Calculations: Accurate overtime and penalty calculations
- Record Keeping: Digital audit trails for 7+ years
- Compliance Alerts: Proactive notification of potential underpayments
Employer Benefits
- 99.8% payroll accuracy rate
- Zero wage theft penalties for compliant clients
- 75% reduction in payroll processing time
- Automated Fair Work reporting
Choose from our Standard or Advanced plan to suit your business needs, and stay Fair Work compliant with confidence.
Underpayment Q&A: Your Top Questions Answered
Q1: What’s the difference between underpayment and wage theft?
A: Underpayment refers to any instance where employees receive less than their entitled wages, whether intentional or accidental. Wage theft specifically refers to deliberate, intentional underpayment of employees’ entitlements. Since 2024, intentional wage theft can result in criminal penalties including significant fines and even imprisonment in some states.
Q2: Can I claim unpaid wages if I was paid cash-in-hand?
A: Yes, cash payments don’t remove your entitlement to proper wages. You can still make a claim, though it may be more challenging without formal records. Evidence can include bank statements showing regular cash deposits, text messages discussing hours or pay, witness statements from coworkers, or your own detailed records of hours worked.
Q3: What if I signed a contract agreeing to lower rates than the award?
A: Any contract term that provides less than the minimum award or legal entitlements is void and unenforceable. Even if you signed such a contract, you’re still entitled to be paid according to the relevant award or agreement. Employers cannot contract out of their legal obligations.
Q4: How far back can I claim unpaid superannuation?
A: Unlike other wage claims, there’s generally no time limit for claiming unpaid superannuation. You can go back to when the super was first owed, though practical limitations may apply. The ATO can help recover unpaid super going back multiple years.
Q5: What happens if my employer disputes my hours or classification?
A: If your employer disputes your claims, the burden of proof often shifts to them to provide evidence. Employers are legally required to keep accurate time and wages records. If they cannot produce these records, Fair Work may accept your reasonable estimates of hours worked.
Q6: Can I claim for unpaid wages if I’m no longer employed there?
A: Yes, former employees have the same rights to claim unpaid wages as current employees. The process is identical, and time limits still apply (generally 6 years). Many wage claims are actually made by former employees.
Q7: What if I was classified as a contractor but believe I was actually an employee?
A: This is common. If you were really an employee misclassified as a contractor, you can claim all employee entitlements including minimum wages, leave, and superannuation. The Fair Work Ombudsman uses a multi-factor test to determine your true employment status.
Q8: Are there protections against being victimized for making a claim?
A: Yes, the Fair Work Act provides strong protections against adverse action (including dismissal, discrimination, or threats) for exercising workplace rights. If you experience victimization for making a wage claim, you may have additional legal claims against your employer.
Q9: What if my employer says they can’t afford to pay what they owe?
A: Financial difficulty doesn’t remove the legal obligation to pay owed wages. Options include: payment plans (get this in writing), Fair Work enforcement action, or if the company becomes insolvent, claiming through the Fair Work Entitlements Guarantee scheme.
Book a free demo with our payroll experts and experience how Workstem can streamline your payroll and workforce operations.
Read More：
2025 Cleaning Services Pay Calculator: Avoid Underpayment Risks
Avoiding Underpayments: Tackling the complexities of the SCHADS Award
Underpayment Is Now a Crime: Protect Your Business with Workstem
