Aged care home to pay $11.7 million after 5,500 staff underpaid

In one of the largest wage remediation cases to hit the Australian aged care sector, Southern Cross Care (NSW & ACT) has entered into a formal court-enforceable agreement to pay back more than $11.7 million to thousands of its workers. 

The not-for-profit provider, which operates 54 communities and residential homes across NSW and the ACT, self-reported the massive blunder to the Fair Work Ombudsman (FWO) after a single employee's query about overtime triggered an internal audit in 2023.

The underpayments spanned seven years, from July 2017 to October 2024, affecting a broad spectrum of the frontline workforce. 

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The shortfall impacted home care employees, registered and enrolled nurses, assistants in nursing, facility managers, and even support staff like cooks and handypersons. 

While the average back-payment sits at $1,716, the gap for some individuals was life-changing, with one worker found to be owed a staggering $44,593 in unpaid wages, superannuation, and interest.

Southern Cross Care admitted the underpayments were the result of outdated systems, including a manual payroll process and a faulty time-and-attendance system that failed to calculate overtime, weekend penalties, and shift loadings correctly against enterprise agreement requirements. 

Fair Work Ombudsman Anna Booth said the case serves as a stark warning to all Australian employers that worker entitlements can quickly create a massive bill if not managed with appropriate checks and balances.

Under the terms of the Enforceable Undertaking, the provider has already paid back $10.1 million to over 3,600 employees identified so far. 

The organisation is now under strict orders to locate the remaining staff within 60 days or forfeit the outstanding wages to the Commonwealth Consolidated Revenue Fund. 

Beyond the payments, Southern Cross Care is mandated to overhaul its payroll technology, fund independent compliance audits, and establish an external whistleblower hotline to ensure such a systemic failure never happens again.

The provider's footprint is significant, with services spanning Sydney, the Central Coast, the Far North Coast, Riverina, the South West Slopes, and the ACT. 

The FWO noted that the provider's cooperation and transparency were key reasons why an Enforceable Undertaking was chosen over more severe litigation. 

In a statement provided to nine.com.au, a Southern Cross Care (NSW & ACT) spokesperson said the aged care provider had acted immediately when the incorrect payments were identified.

"All affected current staff have been properly compensated. We continue to rectify payments for former employees and are strengthening our systems and processes to ensure this does not happen again," the statement said.

Current and former employees are encouraged to contact the provider or the Fair Work Infoline.

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