A not-for-profit business in northern NSW inadvertently underpaid 18 employees a total of more than $370,000 after incorrectly classifying each of them as an ‘employee with a disability’, an audit by the Fair Work Ombudsman has found.
The employees were underpaid by Challenge Community Services, which provides supported employment for workers with a disability.
This includes sewing and laundry services in Tamworth, Muswellbrook and Narrabri.
Fair Work Ombudsman inspectors audited the organisation last year after receiving requests for assistance from a number of workers.
Inspectors found that the Enterprise Agreement that applies to Challenge Community Services allows for workers eligible to receive the Commonwealth Disability Support Pension to be classified as ‘employees with a disability’ and paid a pro-rata amount of the Award wages that apply to their positions, with the pro-rata amount determined by a skills assessment.
Inspectors found that Challenge Community Services had correctly classified most of its employees and was paying them correctly.
However it had incorrectly classified 18 workers as being ‘employees with disability’ as they were neither in receipt of, nor eligible for, the Disability Support Pension.
The Fair Work Ombudsman determined that the underpayments resulted from Challenge Community Services having limited information on the status of some workers’ eligibility for the Disability Support Pension and inadequate human resources procedures.
Challenge Community Services fully co-operated with the Fair Work Ombudsman and proactively reviewed the 18 employees’ full employment periods to determine it had inadvertently underpaid them a total of $371,876 in wages and superannuation between 2010 and 2016.
The workers were aged between 17 and 64, including five under 25 and two in their 60s.
The largest individual underpayment was $63,822 of a worker, now aged in his 50s, who was paid an hourly pro-rata rate as low as $8.82.
Challenge Community Services has back-paid all workers in full and the organisation and its chief executive, Barry Murphy, have entered into an Enforceable Undertaking (EU) with the Fair Work Ombudsman to ensure future compliance with workplace laws.