You weren’t trying to cut corners.
You were busy running a business, managing rosters, chasing compliance, holding the whole thing together. And somewhere in that, a payroll gap crept in. Wrong award classification. Missed travel time. Kilometres that never made it onto the payslip. A support worker paid the wrong penalty rate for a Saturday shift, every Saturday, for two years.
You’ve just found it.
The first instinct is to quietly fix it going forward and never speak of it again.
I need to tell you why that instinct is the most dangerous thing you can do right now.
How this actually happens in care businesses
This isn’t usually a story about a provider trying to get away with something.
It’s a story about a provider who set up their payroll early, before they understood the award properly, and never went back to check it against how the business actually grew. Classifications that were right for one worker get copied across ten more without checking they still fit. Travel time between clients gets treated as a grey area instead of a paid one. Broken shift allowances get missed because nobody flagged the shift as broken in the system.
The most common gaps I see in this sector are underpaid travel time and kilometres, incorrect award classification as staff take on more senior duties without a pay review, missed broken shift and overnight allowances, and overtime that gets absorbed into a flat rate instead of paid properly.
None of that makes you a bad employer. It makes you a busy one who built the payroll system once and never had the time to go back and pressure test it.
What matters now isn’t how it happened. It’s what you do next.
Where this actually sits legally
Since January 2025, intentional underpayment of staff is a criminal offence under the Fair Work Act. For individuals, that carries the possibility of imprisonment and fines that run into the hundreds of thousands of dollars. For companies, the fines run into the millions.
That’s the criminal side. It doesn’t stop there.
Civil penalties apply as well, and they apply regardless of intent. So even in a business where nobody set out to underpay anyone, the civil exposure is still real, and it’s higher than it used to be. The distinction between “we made a mistake” and “we knew and did nothing” is the line that decides which category a business falls into, and that line gets assessed on your actions from this point forward, not just on how the underpayment started.
Most providers I talk to think they’re facing one or the other. They’re not. Depending on how the underpayment happened and how long it went on, a business can be looking at both civil and criminal exposure at the same time.
I’m not telling you this to frighten you. I’m telling you this because the next part is where your position actually changes.
Self reporting changes everything
If you go to the Fair Work Ombudsman before they come to you, you are in a completely different position than the provider who waits and hopes.
The Ombudsman can enter into a cooperation agreement with employers who make a full and honest disclosure. That agreement stops your case from being referred to the Director of Public Prosecutions or the Australian Federal Police. You can also negotiate a payment plan to correct the underpayment over time, rather than facing a lump sum demand you can’t meet.
The Ombudsman looks at what an employer has actually done to fix the problem when deciding how to respond. A provider who found the gap, ran a proper audit, and disclosed it in full is treated as a fundamentally different case to a provider who was reported by an underpaid staff member after months or years of silence.
Waiting is what turns a correctable payroll issue into a criminal one.
A cooperation agreement protects you from criminal referral. It doesn’t automatically remove civil exposure. That’s a conversation to have properly with someone who understands the difference, not something to assume your way through.
What to do before you report anything
Don’t walk into Fair Work with a guess.
The Ombudsman’s Payroll Remediation Program guide sets out what they expect to see: a proper diagnosis of the problem, a plan to find and pay everyone affected including former staff, and a full, frank disclosure. You can read it here: fairwork.gov.au/newsroom/news/new-payroll-remediation-program-guide
Before that conversation happens, you need four things sorted.
An accurate audit. You need to know exactly who was underpaid, by how much, and over what period. This includes current staff and anyone who has left the business in that window. Guessing at this stage weakens your position instead of strengthening it, and the Ombudsman can tell the difference between a real audit and a rough estimate.
A clear picture of your exposure. Civil, criminal, or both. This determines how the disclosure needs to be framed and what protections you can realistically ask for. It also shapes how urgently you need to act.
A remediation plan. How the back payments will actually be made, over what timeframe, and how you’ll communicate this to affected staff. The Ombudsman wants to see a plan, not just an admission.
A disclosure that meets the standard the Ombudsman is looking for. Voluntary. Frank. Complete. Half a disclosure is worse than none, because it signals you’re managing what they see rather than being upfront about it.
What happens after you report it
Self reporting isn’t a single conversation and then it’s over.
Once you’ve disclosed, the Ombudsman assesses the nature and detail of what you’ve provided, along with your level of cooperation, before deciding whether to offer a cooperation agreement. If they do, you’ll work through a structured process to identify and pay every affected employee, including anyone who’s left the business, with documentation at every step. This is exactly why the audit needs to be right before you start.
This process takes time. It isn’t resolved in a week. But every week you’re in it, you’re protected from criminal referral under the agreement, which is a very different place to be standing than the provider who hasn’t reported at all.
The part I want you to sit with
Finding this problem isn’t the failure.
Sitting on it is.
Every week you wait is a week your exposure sits there unmanaged, and a week closer to someone else finding it before you report it yourself. An employee, a departing staff member, an audit you didn’t see coming.
You built this business because you care about the people in it. Fixing this properly, and protecting your staff and your business at the same time, is exactly what that care looks like in practice.
Once this is sorted, the next step is making sure it can’t happen again. That means a payroll system that gets checked against the award on a set schedule, not just when someone raises a concern. A one off fix without that review process just resets the clock on the same problem.
Make sure this doesn’t happen again
Most underpayment gaps happen the same way. A payroll process that relied on memory or a spreadsheet drifted away from the award over time, and nobody was checking closely enough to catch it before it became years of back pay.
This is where a tool like PayCat changes things. PayCat, paycat.com.au is payroll software built specifically for NDIS, home care, and aged care providers, designed around SCHADS award compliance rather than generic payroll. It integrates with your rostering system, cross checks every pay run against the current award in real time, and applies classifications, allowances, and penalty rates automatically instead of relying on someone calculating them manually each cycle.
That’s the real fix here. Not a person checking quarterly and hoping nothing’s changed, but a system that checks every single pay run, automatically, against the award as it currently stands. If you’re rebuilding your payroll process off the back of this, integrating a tool like PayCat with your existing payroll and rostering platforms is the single biggest change you can make.
If you think this applies to you, don’t sit on it. Get the audit done, understand where you actually stand, and make the report on your terms, not someone else’s.
Reach out to a HR consultant who can walk you through this process properly. I highly recommend Carla Canning from Connect Lead Achieve: connectleadachieve.com.au
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