Record $11.7 Million Settlement: Aged Care Home Faces Consequences for Underpaying 5,500 Employees

In a significant development within Australia’s aged care industry, Southern Cross Care (NSW & ACT) has committed to reimbursing over $11.7 million to its workforce following a large-scale wage remediation issue.

The not-for-profit organization, managing 54 community and residential care facilities throughout New South Wales and the Australian Capital Territory, voluntarily disclosed the error to the Fair Work Ombudsman (FWO). This decision came after an employee’s inquiry about overtime led to a comprehensive internal review in 2023.

The wage discrepancies, which extended from July 2017 to October 2024, affected a wide range of frontline staff.

Those impacted included home care workers, registered and enrolled nurses, nursing assistants, facility managers, and support staff such as cooks and maintenance personnel.

On average, employees are set to receive $1,716 in back wages, although some individuals experienced substantial financial losses, with one worker owed as much as $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Southern Cross Care admitted the underpayments were the result of outdated systems, including a manual payroll process and a faulty time-and-attendance system that failed to calculate overtime, weekend penalties, and shift loadings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. 

Nine.com.au has contacted Southern Cross Care for comment.

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

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