A Tasmanian disability services provider has committed to repaying staff members after discovering it had underpaid them for years, resulting in around $700,000 being owed.
The amount owed is still being calculated, but chief executive Darren Mathewson said he expects hundreds of staff members have been underpaid a combined amount of up to $700,000 across a number of years.
He said the NDIS-registered Tasmanian provider immediately started auditing its payroll once it discovered the error.
“We were extremely concerned when we discovered this error and immediately began the work required to audit our payroll and pay all current and former employees their full entitlements as soon as we can,” Mr Mathewson said in a statement.
“Our people are important to us; they are the lifeblood of what we do in providing support to Tasmanians living with disabilities and their families every day. Resolving this issue is our top priority.”
“We will be issuing a formal apology to our staff. We have let our people down, but we are making sure we fix it. Every dollar we owe will be paid.”
The Fair Work Ombudsman is investigating Li-Ve Tasmania.
“As this matter is ongoing, it is not appropriate to comment further at this time,” a Fair Work Ombudsman spokesman said.
Fears sector will face more issues
The Health and Community Services Union said it was an already low-paid sector, so workers can be hit hard when their pay packets were smaller than they should be.
“This is significant because these workers are paid just award wages, so when they are underpaid it really does affect them and their day-to-day living,” HACSU assistant secretary Robbie Moore said.
“The fact they’ve been underpaid $700k is very alarming.”
Mr Moore is concerned underpayments will happen more often as independent contractors enter the industry.
He said anyone short-changing staff would be vigorously pursued.
“We need to ensure that underpayments to these staff that provide vital services to the community are being paid appropriately so they can earn the living they need, to provide for their family and pay all their bills and their mortgages.”
Providers under cost pressures
Li-ve is not the first disability provider to have been found to be underpaying workers.
In 2020, Disability Services Australia was forced to back pay more than 800 employees $1.6 million in entitlements.
Last year Wellways Australia committed to repaying staff $1.5 million.
Fiona Macdonald, from the Australia Institute’s Centre for Future Work, said there was no data on the prevalence of underpayments in the disability services sector, but it was potentially widespread.
She said providers were under pressure to minimise costs.
“I did some research a couple of years ago where we had some workers keep time diaries, and we identified quite a lot of underpayment, it was only a small number of workers but all of them had been underpaid in one way or another,” she said.
Underpayment occurred in various ways, including when workers were paid for less time than it took to perform their job.
“That’s a very easy thing to do if you’ve got workers working two hours providing support to one person and then going somewhere else to someone else’s private home to provide additional support and they haven’t been paid for the time in between,” Dr Macdonald said.
Some changes have been made, including improving rules around broken shifts — the area Li-Ve’s underpayments stemmed from.
Dr Macdonald says competition in the disability services market was contributing to the problems.
“Fundamentally a big part of the problem is the way in which the disability support system funds disability support, which is by the hour, and it’s at a low price, so there is an enormous pressure on providers to minimise costs.”