The Fair Work Ombudsman (FWO) has released its Aged Care Services Sector Investigation Report, following a nationwide proactive investigation into direct care employees in the aged care services sector. The FWO investigated 22 businesses across residential aged care and home care and found that 13 (59%) were non-compliant with the Fair Work Act 2009 (Cth) in one or more respects. As a result, more than $5.3 million was recovered for 3,591 employees, and two businesses paid a total of $4,620 in fines.
What the investigation covered
Between February 2025 and May 2026, Fair Work Inspectors examined a representative sample of direct care employees (including personal care workers, assistants in nursing, enrolled nurses and registered nurses) for a three-month assessment period from 1 October to 31 December 2024. The investigation involved both announced and unannounced inspections at 27 locations, worker and management interviews, and the use of statutory notices to produce information.
Most common contraventions and their causes
The FWO's findings show a pattern of underpayments across both residential aged care and home care providers. At a high level, the most common contraventions were:
- Underpayment of minimum or base rates of pay.
- Underpayment or non-payment of broken shift allowances/entitlements.
- Non-payment or incorrect payment of minimum engagement periods (particularly in home care).
- Underpayment of overtime.
Other issues identified included weekend and public holiday penalty rates, shift allowances, annual and personal leave (and leave loading), pay slip content, record-keeping of actual hours worked, and (in the home care sector) travel time and kilometre reimbursements. A small number of businesses also failed to provide Fair Work Information Statements or advertised rates of pay below the applicable award minimum.
The FWO attributed these contraventions to relevant awards (principally the Aged Care Award 2010, the Nurses Award 2020 and, for home care, the Social, Community, Home Care and Disability Services Industry Award 2010), applicable enterprise agreements, and the National Employment Standards. The leading causes of non-compliance were:
- Incorrectly classifying employees.
- Incorrectly calculating overtime.
- Incorrectly applying broken shift provisions.
- Incorrectly paying minimum engagement periods.
- Failing to ensure the base rate of pay under an applicable enterprise agreement was at least the base rate under the underlying award.
- Failing to keep adequate time records.
A recurring theme: misinterpretation, not intent
Encouragingly, the FWO reported that employers were generally cooperative and proactive once issues were identified, often rectifying underpayments swiftly and across broader cohorts and periods than strictly required. In its case study, a home care provider that had misapplied broken shift and minimum engagement provisions since 2023 back-paid over $2 million to more than 600 employees once the error was identified, and implemented payroll system improvements and targeted training to prevent recurrence. This underscores that many contraventions in the sector stem from misinterpretation of award provisions and payroll configuration issues, rather than deliberate underpayment, but the financial and reputational consequences of getting it wrong remain significant.
What should employers be doing now?
In its report, the FWO suggested actions that employers should take to avoid underpayment. Most notably, in response to incorrect award classification of employees leading to incorrect rates of pay, the FWO suggest that employers should seek advice regarding the classification of their employees, undertake regular audits to identify non-compliance issues early and review payroll and rostering systems to ensure compliance.
Read the full report
The full Aged Care Services Sector Investigation Report is available from the FWO, and a summary media release is also available online, at:
Fair Work Ombudsman media release (28 August 2026):
Full Aged Care Services Sector Investigation Report
How we can help
Our Workplace Relations, Employment & Safety Team have a significant amount of experience in advising clients in the aged care and social and community sectors regarding compliance with their legal obligations to pay employees correctly and the rectification process, including any interaction with the FWO.
Given the FWO's continued focus on the aged care services sector as a compliance priority, now is a timely opportunity for providers to proactively audit and review, before any issues are identified through a complaint or FWO inquiry.
If you have any questions about your obligations please contact a member of our Workplace Relations, Employment and Safety Team.
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This summary is intended as general information only and does not constitute legal advice. You should seek specific legal advice in relation to your individual circumstances.