Wage Theft Prevention for Care Employers: A Compliance Checklist

Updated 24 July 2026

Since 1 January 2025, intentional underpayment of employee wages or entitlements can be a criminal offence under the Fair Work Act, following the Closing Loopholes reforms. These laws are now in force. According to the Fair Work Ombudsman, the offence covers intentional conduct and does not capture honest mistakes. Maximum penalties are significant: individuals found guilty can face up to ten years' imprisonment, while companies can be fined the greater of three times the underpayment amount or $8.25 million. For NDIS and disability care providers, the sector's complex Award structure creates genuine risk that underpayments occur unintentionally, so a proactive compliance programme matters more than ever.

The Wage Theft Prevention Checklist

Award Classification and Base Rates:

• Have all employees been classified under the correct SCHADS Award classification level and stream?
• Are base hourly rates at or above the current Award minimum for each classification?
• Were rates updated for the most recent annual wage review?
• Are there any employees whose roles have changed requiring reclassification?

Penalty Rates and Allowances:

• Are evening, night, Saturday, Sunday, and public holiday penalty rates correctly configured?
• Is the "highest single rate applies" rule implemented (penalties are not cumulative)?
• Are all applicable allowances configured: broken shift, sleepover, first aid, uniform, vehicle?
• Are allowance rates current (allowances are indexed annually)?

Minimum Engagement and Hours:

• Is a two-hour minimum engagement floor applied for all casual and part-time shifts?
• Are part-time employees receiving their agreed minimum hours each pay period?
• Are overtime hours calculated correctly?

Leave Entitlements:

• Are annual leave accruals calculated correctly for all full-time and part-time employees?
• Is the 17.5% annual leave loading being paid when employees take leave?
• Are leave balances correctly paid out on termination?

Superannuation:

• Are super contributions being calculated on the correct OTE base?
• Is the current Superannuation Guarantee rate being applied?
• Are super contributions being paid by the quarterly due date?

Building a Proactive Compliance Programme

A checklist completed once is a snapshot. Wage theft prevention requires an ongoing programme: annual payroll audit before and after 1 July each year; triggered reviews on operational changes; employee feedback channels for raising payroll queries; and software and system governance ensuring every payroll system change is documented, reviewed, and tested before it affects a live pay run.

The Fair Work Ombudsman's guidance on underpayments and how to fix them is the authoritative reference for care employers. Small businesses that comply with the Voluntary Small Business Wage Compliance Code can also protect themselves from criminal prosecution where an underpayment was not intentional. If you identify a shortfall, act early, back-pay promptly, and document the correction.

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