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Disability Services Australia (DSA) has entered into an Enforceable Undertaking (EU) with the Fair Work Ombudsman and is back-paying employees more than $1.6 million.

The not-for-profit organisation, which provides services to disabled clients throughout NSW and operates a packaging factory at Mascot in Sydney, self-reported underpayments to the FWO in 2019.

After being prompted by an employee query, DSA became aware employees at the Mascot site were being provided with gift vouchers in lieu of overtime payments on Sundays, in contravention of workplace laws.

DSA subsequently commissioned an independent investigation of its compliance with workplace relations laws, which identified a range of non-compliance issues affecting supervisors and production staff at the Mascot site and workers in disability support and caring roles located at various locations throughout Sydney and in regional locations such as the Hunter and Southern Highlands regions.

Issues included 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.

To date, the assessment has found that a total of more than 800 DSA employees were underpaid more than $1.6 million between 2013 and 2020. Individual underpayments range from $2 to over $100,000. The underpaid employees are not workers with disabilities.

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.

Further underpayments, expected to be significant in size, are yet to be quantified.

In addition, underpayments totalling less than $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. Both businesses are also covered by the EU.