Disability Services Australia gave some workers gift vouchers in lieu of overtime, Fair Work finds

Disability Services Australia has underpaid 800 workers by more than $1.6 million, the Fair Work Ombudsman says.

Disability Services Australia underpaid some workers for seven years, the Fair Work Ombudsman has revealed.

Disability Services Australia has underpaid 800 workers by more than $1.6 million, with some employees provided with gift vouchers in lieu of overtime payments on Sunday.

The not-for-profit organisation, which provides services to disabled clients throughout NSW and operates a packaging factory at Mascot in Sydney, underpaid the workers over the past seven years.

The Fair Work Ombudsman said it expected to identify further significant underpayments by DSA but could not yet quantify the likely amount. The initial underpayments were reported by DSA to the FWO in 2019.

The FWO said “given the community services role of the not-for-profit organisation”, it did not consider a contrition payment to the Commonwealth was in the public interest.

Following an employee query, DSA said it became aware Mascot site employees were being provided with gift vouchers in lieu of overtime payments on Sundays in contravention of workplace laws.

DSA commissioned an investigation of its compliance with workplace laws and identified a range of non-compliance issues affecting supervisors and production staff at Mascot, and workers in disability support and caring roles throughout Sydney, the Hunter and Southern Highlands regions.

Issues included the incorrect use of time-off in lieu of overtime and penalty rates, underpayment of minimum wage rates, incorrect application of on-call and sleepover provisions, and underpayment of annual leave loading and allowances.

Key factors causing the underpayments included inadequate governance and processes for ensuring compliance, annualised salaries being too low to meet all entitlements such as overtime and penalty rates, and some employees being incorrectly classified as being award free.

Underpayments totalling about $50,000 have been identified at two other businesses operated by DSA - Macquarie Employment Training Services, a registered training organisation, and DSA Mentoring Services, which provides services to facilitate transition to the community for people with complex support needs.

The EU requires DSA, Macquarie Employment Training Services and DSA Mentoring Services to pay amounts owing to every affected employee, plus interest and superannuation, by March 2021.

Fair Work Ombudsman Sandra Parker said an EU was an appropriate outcome as DSA had cooperated with the regulator and demonstrated a strong commitment to rectifying underpayments.

“Under the Enforceable Undertaking, DSA has committed to stringent ongoing measures to ensure it complies with the law and protects its workforce. This includes engaging, at its own cost, an expert auditing firm to check its workplace compliance for the next two years, and report back to the FWO,” Ms Parker said.

DSA must fund an independent organisation to operate a hotline for employees to seek assistance on payroll or related queries; apologise to its employees; and display online, workplace and social media notices detailing its contraventions.