Guides | Peninsula AU

Modern Awards

Understanding the SCHADS Award

The Social, Community, Home Care and Disability Services Industry Award (SCHADS) [MA000100] sets out standards, entitlements, and pay rates for a wide range of roles in the social and community sector. Understanding if your business is covered under the SCHADS Award is important as it ensures you are paying your employees accurately, complying with Fair Work legislation, and maintaining a safe and fair workplace for everyone. In this guide, we breakdown the SCHADS Award, focusing on the 2025 updates, pay rates across various levels, and specific considerations for different states including Victoria (Vic), Queensland (QLD), and New South Wales (NSW). What is the SCHADS Award? The SCHADS Award is a crucial framework in the social and community services sector. It covers a range of professionals, including disability support workers, ensuring fair compensation and work conditions. The award is periodically reviewed to reflect industry changes and economic conditions. SHADS Award Coverage The SCHADS Award covers employers and employees who fit within the classifications of the award and are in the following sectors: Crisis assistance and supported housing Social and community services Home care Family day care scheme. The social and community sector means the provision of social and community services including: Social work Recreation work Welfare work Youth work or community development work. This sector also includes: Organisations who primarily engage in policy, advocacy, or representation on behalf of organisations carrying out such work The provision of disability services including the provision of personal care and domestic and lifestyle support to a person with a disability in a: community residential setting respite centre and day services. The home care sector means the provision of personal care, domestic assistance or home maintenance to an aged person or a person with a disability in a private residence. The crisis assistance and supported housing sector applies to organisations providing vital support during times of crisis. This includes: Emergency accommodation Supported housing. The SCHADS Award has separate streams (rules) for each of these industries, so it’s essential to determine which stream applies to your business and employees. 2025 SCHADS Award Update – What You Need to Know The 2025 update of the SCHADS Award introduces significant changes, particularly in terms of pay rates and conditions for overtime. These changes are crucial for maintaining industry standards and ensuring fair compensation for workers. The SCHADS wage increases are in two stages Stage 1 Stage 2 If the percentage increase for a specific classification level exceeds 3%, half of the total increase was implemented on 1 January 2025 The remaining percentage takes effect on 1 October 2025 If the percentage increase for a specific classification level exceeds 3%, but half of the total increase amounts to less than 3%, a 3% increase was applied on 1 January 2025 The remaining percentage will be implemented on 1 October 2025 If the percentage increase for a specific classification level is less than 3%, the full increase was applied on 1 January 2025 No additional increase will occur on 1 October 2025 SCHADS Award Pay Rates by Level The SCHADS Award categorises employees into different levels based on their roles, responsibilities, and qualifications. Here's a breakdown of the pay rates for each level: Level 2 to 8 Pay Rates: Level 2: Generally, for workers with some experience in the sector but not in a supervisory role. Level 3 to 5: These levels include more experienced workers, with Level 5 often involving supervisory responsibilities. Level 6, 7 and 8: These are typically for senior roles that require significant experience and qualifications, with corresponding higher pay rates. SCHADS Overtime Pay Rates The SCHADS Award outlines specific provisions for overtime work, ensuring that employees are fairly compensated for hours worked beyond their normal rostered hours. SCHADS Award Salary Details Salaries under the SCHADS Award vary based on the level, experience, and qualifications of the employee, as well as the specific nature of their role. Disability Support Workers under SCHADS Disability support workers are covered under the SCHADS Award, with their pay rates determined by the level of their role and responsibilities. SCHADS Award in Different States Victoria, QLD, and NSW: While the SCHADS Award provides a national framework, there can be state-specific nuances. Employers and employees in Victoria, Queensland, and New South Wales need to be aware of any state-specific conditions or allowances that may apply. Minimum Wage 2025 Each year, the Fair Work Commission reviews both the National Minimum Wage and the minimum pay rates under awards (Annual wage review). Most changes begin on the first full pay period on or after 1 July. The National Minimum Wage applies to employees not covered by an award or registered agreement. This is the minimum pay rate provided by the Fair Work Act 2009. As of 1 July 2025, the National Minimum Wage is $24.95 per hour or $948.00 per week. Some awards contain introductory pay rates for new employees in their industry. Major Updates in the SCHADS Award Clauses 1. Pay Rate Adjustments: One of the most significant updates in the SCHADS Award is the adjustment of pay rates across various levels. This includes increased base rates for levels 2 through 7, reflecting the growing recognition of the skills and responsibilities in these roles. 2. Overtime and Penalty Rates: Changes to overtime and penalty rates have been implemented, ensuring fair compensation for employees working beyond their standard hours. This includes clearer definitions of overtime work and the corresponding rates applicable. 3. Leave Entitlements: The latest update includes revisions to leave entitlements, encompassing annual leave, personal/carer’s leave, and parental leave. These changes aim to provide greater support and flexibility to employees. 4. Work Arrangements: Updates to work arrangement clauses have been made, offering more clarity on part-time and casual work definitions. This also includes provisions for flexible work arrangements, reflecting the changing nature of work in the sector. 5. Disability Support Worker Provisions: Specific updates related to disability support workers have been made, acknowledging the unique challenges and requirements of these roles. This includes adjustments to pay rates and work conditions tailored to this group. 6. State-Specific Adjustments: The SCHADS Award includes state-specific changes, particularly for Victoria, Queensland, and New South Wales. These adjustments consider the regional variations in the industry, ensuring the award remains relevant and applicable across different states. Implications of the SCHADS changes The updates to the SCHADS Award clauses are not just administrative adjustments; they have real-world implications for the daily operations of organizations within the social, community, home care, and disability services sectors. Employers need to carefully review these changes to ensure that their business practices are aligned with the latest standards, while employees should be aware of their rights and entitlements under the updated award. Understanding and implementing the SCHADS Award is key to supporting a fair and equitable work environment in the social and community services sector. As the industry continues to grow and evolve, staying informed and compliant with these rates and conditions is crucial for the success and sustainability of organizations within this sector. Get expert advice for your SCHADS business Peninsula has worked with several businesses in Australia who operate in the SCHADS sector. We have created factsheets, resources, tools, guides, and software for SCHADS businesses in Australia. We understand the challenges affecting your business and know small businesses need support and guidance for complicated awards and pay rates. Whether you’re in Victoria, QLD, NSW, or any other part of Australia, our team of experts can provide you with the advice and solutions you need to ensure compliance and best practices in your workplace. Contact us to get all your questions answered.

Redundancy

Employee Redundancy Complaints

A redundancy occurs when an employee’s job is no longer required for the business. In some circumstances, this is because new technology fulfils the job obligation, the business is relocating or closing down, or the employee’s job may be divided up and then transferred to various other employees. A genuine redundancy should not occur because of an employee’s performance or conduct. Employers need to follow a fair procedure that includes plenty of consultation and communication. Not surprisingly, some employees may feel their redundancy is unfair and make a complaint. We have compiled some tips on dealing with employee redundancy complaints. Regular communication with all employees is important during periods when business is undergoing major workplace change. Most Modern Awards and registered agreements require employers to consult with their employees regarding changes, including adjustments to production, organisation, structure or technology. Redundancy process There is a process that employers can follow to ensure they are being fair. Initially, you can consult employees who need to be made redundant about: Reasons for redundancy and the jobs affected The alternatives to redundancy, such as voluntary redundancies, or reduced working hours The selection criteria for those employees at risk of redundancy How the redundancy selection assessment was carried out Any suitable alternative work After consultation, you should decide which employees are doing sufficiently similar work and put them in a pool to be considered for redundancy. The selection criteria to decide who is to be made redundant should be non-discriminatory, objective and measurable. Typical criteria could include: Individual skills and qualifications Performance or aptitude for work Attendance and absence record Disciplinary record Customer feedback Information employers need to have To avoid complaints from employees, employers are advised to be prepared for common employee questions and be prepared to show that redundancies are genuine. Ensure you are prepared with information such as what is listed below: Why is there a redundancy situation? Which employees are at risk? Why the employee(s) have been selected and what consideration was given to putting other employees at risk of redundancy? Who was in the selection pool? What were the selection criteria and how were they measured? Whether any employees (at risk of redundancy) have been offered alternative jobs, with details of the jobs It is crucial to determine the minimum notice of termination and redundancy pay entitlements for each affected employee. Notice of termination and redundancy entitlements are contained in the National Employment Standards, however, Modern Awards and Enterprise Agreements often include additional redundancy entitlements for employees. If there is an applicable contract of employment or workplace policy that provides different redundancy amounts than what is outlined in the National Employment Standards, you need to provide the employee with whichever is more generous. An employee may choose to submit a complaint or claim against you (e.g. unfair dismissal, discrimination) even if you follow correct redundancy procedures. Build better businesses with Peninsula Peninsula can help minimise the risks of employee redundancy complaints by providing expert redundancy advice in accordance with Australian Fair Work legislation. Contact Peninsula to learn more. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Redundancy

Redundancy Process

Sometimes an employer will no longer require an employee’s job to be done by anyone due to changes to the operational requirements of the business. This is known as a redundancy. Employers should have a valid reason for making the decision to make an employee redundant and may be required to follow a redundancy process to implement the redundancy. The reasons for redundancy can be the result of introduction of new technology, changes to the market (i.e. lower sales or production), changing operational demands such as automated processes, as well as the general need to increase efficiency and reduce costs of doing business. A redundancy is only exempt from unfair dismissal when the redundancy is genuine. Consulting with employees You are required to consult with the employee before ending their employment as per the terms of the applicable award or registered agreement. If your employee is not covered by an award or registered agreement, there may be no requirement to consult. Consultation usually involves notifying the employees of the proposed change to their employment, invite them to a meeting to further discuss the matter, and taking any suggestions the employee might offer to keep their job into consideration before making a final decision. As part of the consultation process, an employer is usually required to offer the employee that the employee can reasonably do any vacant job within the business or an associated entity. Consultation (Warning) Typically, consultation commences with an informal discussion with an employee outlining that the business is considering making that person’s position redundant and that their job is ‘at risk’. Following this discussion, the employer should give the employee an invitation in writing to a formal meeting to discuss the possibility of redundancy in more depth. The invitation should notify the affected employees of the proposed changes, provide them with details and outline the possible effects. The second consultation meeting should be scheduled at least 24 hours after the invitation is given to allow the employee to consider their position and come up with suggestions that will allow them to keep their job. They may also need that time to seek professional advice or organise a representative or support person to attend the meeting with them. It is a good idea to keep a record of any invitations to redundancy meetings and follow each meeting up with a written summary. Consultation (Subsequent) At the second meeting, the employer would provide the employee with more information about the proposed redundancy. The employer and the employee should explore any options to avoid or minimise the impact on the employee, including any possibility of re-deployment to another position within the business or an associated business, and any alternatives which may save the employee’s job. What amounts to a reasonable deployment depends on the facts of the case and advice should always be taken on specific circumstances. In many cases, to properly satisfy its obligations, a business may be required to meet with the affected employee to consult on more than one occasion. Confirmation The employer should be seen to seriously consider any suggestions that the employee or their representative may raise in the formal consultation meeting before making a final decision. If, after a fair process has been conducted, it is determined that the outcome will be redundancy, a final meeting should be convened. Again, a formal invitation should be issued to allow the employee time to organise representation or a support person to attend with them. At that final consultation meeting, the employer should deliver a preliminary outcome. Following confirmation of redundancy, a formal outcome letter confirming the redundancy, also known as a letter of redundancy, should be issued to the employee. Preparing redundancy outcome documentation The outcome letter should confirm the employee is being made redundant. It should outline the process in coming to that decision, and the reasoning behind it, and any further considerations such as redeployment options. It should also include notice of the last day of employment and details as to final pay and any entitlements owing. Redeployment As part of the consultation process, you should consider is whether you can redeploy any workers to another role within the business or an associated business. This can mean moving a staff member to another workplace or moving an employee from one role to another. Doing so means the employee may be able to fulfil a needed role elsewhere and retain their employment. The employer may need to provide evidence of the steps they have taken to identify other positions that the employee could reasonably do if there is doubt the redundancy is genuine. When considering redeployment, the job must be suitable, in the sense that the employee should have the skills and competence required to perform it to the required standard in order to hit the ground running or else with reasonable retraining. The location and the level of remuneration of the alternative position also need to be reasonable, but the employer should still offer any lower-paid roles with less responsibility or positions located elsewhere to the employee for their consideration. Final pay and notice The National Employment Standards in the Fair Work Act 2009 generally provide the minimum entitlements in respect of notice of termination and redundancy pay for employees covered by the national workplace relations system, however some modern awards and enterprise agreements may provide employees with more or less beneficial entitlements in respect to both notice and redundancy pay, particularly in circumstances whereby if there is an industry specific redundancy scheme. When ending employment because of redundancy, you need to give the employee written notification of the day of termination, and you need to provide adequate notice or make payment in lieu usually depending on how long the employee has been employed in the business. The minimum notice period in the National Employment Standards (NES) is based on how many years your employee has worked in the business (continuous service). Notice is paid at the employee’s full pay rate as if they had worked the minimum notice period, so the notice can include incentive-based payments and bonuses, loadings, allowances and overtime or penalty rates. If an agreement or employment contract, modern award or enterprise agreement stipulates a longer notice period, this will prevail. On top of this, it is important to know that if an employee becoming redundant is over 45 years old and has worked within your business for at least two years, they may be entitled to an extra week’s notice, depending on the applicable award or registered agreement. The employee’s final pay will include the payment of any outstanding wages, accrued entitlements that such as annual leave and annual leave loading if applicable, and possibly other payments such as long service leave, payment in lieu of notice, and redundancy pay. Most awards require you to give a departing employee their final pay within 7 days of their employment ending. Some awards and registered agreements may provide a longer or shorter timeframe. Peninsula can help businesses and employers with staff entitlements, performance management, and essential HR processes. Contact our team to learn how we can support you. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Payroll

Gross pay

When an employee receives a pay slip, it will normally include a figure indicating their ‘gross pay’. Gross pay refers to an employee’s total taxable income for a pay period before any deductions are made. Income tax, Medicare and Social Security contributions, as well as health insurance, superannuation, and any other deductions are not accounted for when an employee’s gross pay is calculated. What is the difference between gross pay and net pay? As well as gross pay, an employee’s ‘net pay’ will also appear on their slip. While gross pay shows the amount the employee has earned before any deductions, net pay reflects the amount the employee will receive after deductions are made. Net pay is almost always a lower figure, reflecting the amount that will be paid into the employee’s bank account. For this reason, net pay is often referred to as ‘take home pay’. Examples of gross pay and net pay If an employee’s annual salary is $120,000, then their yearly gross pay is $120,000 and their monthly gross pay is $10,000. Supposing the same employee paid $29,476 in income tax (calculated based on the current tax rate for this salary), as well as a further $6,524 in superannuation and other contributions, their total deductions will be $35,000. After these deductions are made from the employee’s gross pay ($120,00 minus $35,000), they will be left with a net pay of $85,000. What deductions are taken from gross pay? Mandatory income tax is normally the largest deduction taken from an employee’s gross pay. Australian employers are responsible for deducting tax and sending it to the Australian Taxation Office (ATO). Anybody who is self-employed needs to calculate their own tax return, set the money aside and pay it directly to the ATO. It’s also compulsory that employers deduct 2% from an employee’s gross pay for Medicare. Further deductions may also be agreed on between an employer and employee, including superannuation and health insurance contributions. Are employers allowed to make deductions? Employers are legally obligated to make income tax and Medicare deductions from an employee’s pay. Beyond this, an employer can only deduct money if: The employee agrees in writing and it’s principally for their benefit The employee has outstanding court ordered payments The deduction is allowed by a law or by the Fair Work Commission The deduction is allowed under the employee’s Modern Award The deduction is allowed under the employee’s registered agreement, which the employee has signed and agreed to An employee’s written agreement must be genuine, and they can’t be forced by an employer into agreeing to any deductions. It’s important to note that deductions should be shown on the employee’s pay slip, as well as their time and wages records. Calculating gross pay If you’re an employee and you want to calculate your gross pay, you can use the information included in your latest pay slip. The calculation you need to make will vary depending on whether you are paid an annual salary or hourly wage. How to calculate gross pay for an annual salary The salary recorded in your employment contract will be your official annual gross pay. You can also figure this out by referring to a pay slip. If your pay slip shows a gross monthly pay of $6,000, then you simply multiply this amount by the twelve months of the year (6,000 X 12 = 72,000). Your gross annual pay is $72,000. Similarly, your annual salary divided by twelve gives you your monthly gross pay. If you receive any bonuses, financial benefits or commissions, you’ll need to add these too. If you earn $72,000 as a base annual salary, but you’re also paid $5,000 in bonuses for the year, your gross annual pay is $77,000. How to calculate gross pay for an hourly wage If you earn an hourly rate of pay and you’re unsure of how many hours you’ll work annually, it’s easiest to wait until the end of the year and calculate it then. If you work set hours each week, you can calculate your gross annual pay yourself in advance. If you work 20 hours a week at an hourly rate $20, your weekly gross pay is $400, your monthly gross pay is $1,600, and your gross annual pay is $19,200. Remember – if you take any unpaid days off in the year, you’ll need to deduct the pay from your gross pay. Similarly, if you receive a pay rise or take on any additional shifts, you’ll need to recalculate the rest of the year with the new pay rate or increased number of hours included. What is gross salary? Gross salary refers to the total amount an employer regularly pays to an employee, normally expressed an annual sum that is divided into fortnightly or monthly payments. When an employee starts a new job or receives a pay rise, their gross salary will be agreed upon and laid out in an employment contract. Much like gross pay, gross salary is an employee’s income before taxes and any other contributions are deducted. Net salary refers to an employee’s take home salary after deductions are made. Importance of gross salary As an employer, it’s vital you have an accurate understanding of each employee’s gross salary. Gross salary is used to calculate the percentage of an employee’s pay you should withhold for taxes, while it can also be used to calculate an employee’s redundancy pay entitlements. Businesses also rely on gross salary information when budgeting and financial planning. By knowing their total labor costs, employers can allocate financial resources effectively and make informed decisions about expenses, investments, and future growth opportunities. As an employee, the gross salary an employer offers will be crucial when deciding whether or not to accept a job offer. Gross salary is also important to employees because it is used by creditors when they review loan applications. What is gross income? Gross income includes an employee’s gross salary, as well as any: Tips Commissions Bonuses Financial benefits Dividends Capital gains Pension payments Gross annual income refers to all of the above, combined into a yearly sum. If you’re an Australian employer struggling with wages and pay, call our advice line on 1300750491 to get all your questions answered. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.