The underpayment of employees, commonly called wage theft, is an escalating concern across Australia’s aged care sector. Since the aged care royal commission’s findings, the Federal Government has been rolling out significant reforms to improve the quality of care and enhance transparency and accountability across the sector.
From a compliance point of view, the new Aged Care Act – which will now become law on 1 November – will prioritise older people. But aged care workers will play an important role in its successful implementation.
In addition, since 1 January this year, intentionally underpaying an employee’s wages or entitlements can be a criminal offence, and the Fair Work Ombudsman is proactively investigating the aged care sector. Aged care providers should review their compliance before the FWO does an unannounced inspection.
Yet wage compliance remains a critical gap. Aged care providers must demonstrate they are paying staff fairly and following workplace laws. They must also recognise that these practices are essential to retaining skilled workers, earning community trust, and delivering safe, high-quality care to older Australians.
Recent high-profile underpayment cases have exposed how widespread the problem can be. Often, these incidents arise from complex award structures and administrative failures rather than deliberate misconduct. But regardless of intent, the consequences can be severe, including financial penalties, reputational damage, and a loss of employee confidence.
In a sector under intense scrutiny and powered by a predominantly female, deeply committed workforce, aged care providers must treat wage compliance as a strategic priority. This includes investing in systems that reduce administrative burdens, eliminate manual errors, and ensure every employee is paid correctly, every time.
Understanding the wage compliance challenge
Australia’s industrial relations framework is one of the most complex in the world. Aged care organisations must navigate a maze of modern awards, enterprise agreements, state-based entitlements and Fair Work obligations. This is further complicated by:
Multiple awards and classifications: A single facility may employ nurses, care workers, cooks, cleaners and administrative staff, each covered by different awards or agreements with varying pay rates, penalties and allowances.
Variability across jurisdictions: Entitlements like long service leave or portable leave schemes can differ between states, creating challenges for providers operating across borders.
Flexible and rotating shifts: Many aged care workers perform different duties across multiple shifts and departments, sometimes under different award conditions in the same week.
Manual processes and legacy systems: Many aged care providers still rely on spreadsheets, paper timesheets or disjointed systems to manage rosters, timekeeping and payroll. This significantly increases the risk of errors and underpayments.
The cumulative effect is a system in which even well-intentioned providers can find themselves on the wrong side of wage laws.
The cost of getting it wrong
Wage theft isn’t just a compliance issue; it’s a workforce issue. The aged care sector is already facing critical staff shortages. As demand grows due to Australia’s ageing population, providers must do more to attract and retain skilled professionals.
Failure to pay workers correctly undermines morale, increases staff turnover and ultimately compromises the continuity and quality of care. To meet community expectations, aged care organisations need to demonstrate they are compliant and fair and transparent employers.
Technology has a critical role to play in achieving this. But it must be supported by leadership commitment, strong governance and a culture that values transparency and fairness.
By embedding compliance into daily operations, aged care organisations can reduce risk, support their employees and build a stronger, more trusted care system.
Damien Durston is ANZ head of workforce management solutions at OneAdvanced
Comment on the story below and find more opinion articles here. Do you have an opinion to share about an issue or something topical in the aged care sector? Get in touch at editorial@australianageingagenda.com.au
