Aged care workers paid back $2.1m after payroll error

An aged care service provider has paid back $2.1m to aged care workers across the country after a payroll error was discovered in 2020.

The Fair Work Ombudsman (FWO) said both current and former staff working for the provider Calvary Administration had received incorrect payments due to an error related to a Sunday penalty rate for two years.

After discovering the error in July 2020, the provider self-reported under its former name, Japara Administration.

"[The rate] that should have been applied under a new agreement was not applied to any relevant worker between April 2018 and May 2020," the FWO said.

The failure occurred following a new agreement and affected full-time, part-time, and casual workers at aged care facilities across Victoria, New South Wales, South Australia, and Tasmania.

As a result, the company underpaid 2,800 employees more than $1.8 million.

The company paid back $2,103,617 with interest and superannuation.

Fair Work Ombudsman Anna Booth said it was important for employers to keep payroll software updated to avoid situations like this.

"This matter shows how important it is for employers to place a high priority on their obligations, to ensure that their systems provide for full compliance with all entitlements," Ms Booth said.

"Shortcomings in the company’s payroll system and broader compliance led to breaches of their own enterprise agreements that left hard-working employees shortchanged."

"Improving compliance in the care sector is a priority for the Fair Work Ombudsman in 2023–24. In this and other sectors, we expect employers to invest the time and resources to regularly review if they are meeting all lawful entitlements and to remedy any issues."

Calvary Administration signed an enforceable undertaking (EU), a legally binding agreement that outlines specific actions Calvary must take to rectify the underpayment.

The EU requires Calvary to ensure relevant staff undertake workplace relation training and run a service desk for a year so employees can raise questions about their pay or entitlements.

"Under the enforceable undertaking, Calvary Administration has committed to implementing stringent measures to ensure its workers are paid correctly," Ms Booth said.

"These measures include commissioning, at its own cost, independent audits to check its compliance with workplace laws over the next two years."

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