SA home care workers allegedly underpaid

Workers at an Adelaide home care company have allegedly been underpaid nearly $9000.

Care Providers, which trades as ESAR Home Care and works with elderly and disabled people, is accused of breaching sham contracting laws and underpaying four workers by $8923 over seven months last year, the Fair Work Ombudsman says.

The company allegedly deliberately or recklessly misclassified the workers as contractors and one was underpaid more than $5200.

Care Providers employed the workers through contracts with companies Klemtrac and Easttrac, which were established exclusively to provide it with labour.

The workers should have been treated as employees because of the high level of direction and control that Care Providers had over their work, the ombudsman says.

The company allegedly used that business model with a previous entity, Nortrac, despite being warned in 2011.

Care Providers, Klemtrac and Easttrac are all accused of breaching workplace laws, with a directions hearing scheduled in the Federal Court on July 25.

The Fair Work Ombudsman first started investigating Care Providers after receiving a referral from the administrators of Nortrac after it went into liquidation.

The folding of Nortrac and the establishment of Klemtrac and Easttrac have been referred to the Australian Securities and Investments Commission.