Changes to the SCHADS Award: Are you ready?

Following completion of its four-yearly review, the Fair Work Commission (FWC) has announced changes to the Social, Community, Home Care and Disability Services Industry Award 2020 (SCHADS Award). The changes will come into effect from 1 July 2022, or the first pay period after that. 

The SCHADS Award is a highly complex modern award that runs to more than 100 pages. To help your organisation remain compliant with these changes, we’ve outlined what’s going to change and how you can prepare.

Who is covered under the SCHADS Award?

The SCHADS Award covers employers in the social and community services sector, including many charities, not-for-profits, and NDIS providers. It covers these areas:

• Crisis assistance and supported housing sector

• Social and community services sector

• Home care sector

• Family day care scheme sector

However, the SCHADS Award does not cover employers and employees who are covered by the following awards:

• Aged Care Award

• Amusement, Events and Recreation Award

• Fitness Industry Award

• Health Professional and Support Services Award

• Nurses Award

For detailed information on the SCHADS Award, refer to this page of the FWC website.

What are the changes to the SCHADS Award?

We’ve identified five key areas of the award that will be impacted.

Change #1: Minimum engagement increase

New minimum engagement periods of two hours will apply to part-time employees. For casual home care employees, the minimum engagement will increase from one hour to two hours.

As NDIS supports are generally delivered and billed by the hour, rather than two-hour blocks, managing this change will require particular care.  

The FWC has acknowledged this complexity by providing a transitional period from 1 February 2022 to 1 October 2022 to give employers and employees time to negotiate changes to shifts.  

This transition period only applies to arrangements in place before 1 February 2022. 

If a part-time employee is currently engaged in a regular pattern of work including shifts of less than two hours, the employer must discuss the changes with the affected employee and genuinely try to reach an agreement on a variation of working hours that will make them consistent with the hours prescribed by the FWC, and reasonably accommodate the employee’s circumstances. 

If both parties have genuinely tried to reach an agreement, but no agreement is reached, including because the employee has refused to confer, the employer may vary the agreement to provide for periods of work that are consistent with the required hours.

Change #2: Workers to be paid for broken shifts

A broken shift is defined as a shift with one or more breaks (that aren’t meal breaks) within a 12-hour period.  

The broken shift provisions have been updated to include a broken shift allowance payable for each shift worked and the application of minimum engagement periods for each portion of a broken shift. 

Under the award changes, workers will be paid an additional allowance of 1.7% of the standard rate per broken shift, or 2.25% of the standard rate for two unpaid breaks in shifts in a 12-hour period. The award does not specify an allowance for more than two unpaid breaks, or indicate whether these will be allowed.

Change #3: Worker reimbursements for client cancellations

Under this change, an employer will no longer be able to withhold payment for a cancelled shift. Depending on circumstances, the employer must either find an equivalent shift for the worker or pay them the full rate. 

The Short Notice Cancellation rule in the NDIS Pricing Arrangements is currently only two clear business days, so this is expected to be another significant change to navigate. 

There are also new conditions around when make-up time can occur, how much notice employers need to provide, and the kind of make-up time that can be offered.

Change #4: Working outside of hours

This change has been made in response to calls for the FWC to acknowledge the impact of duties undertaken for work purposes spilling into the non-work lives of employees. Such duties might include taking phone calls, handling emergencies and implementing short-notice roster changes. It will take the form of a new clause applying to “remote response” work that requires employees to be paid for time spent working remotely outside their normal hours of duty. 

A scale of minimum payments will be applied for employees performing remote work outside of their rostered hours and designated shifts The scale ranges from 15 minutes of pay to 275% of the minimum hourly rate in certain circumstances.

Change #5: Clarity around overtime rates and on-call allowances

A minimum engagement period of two hours will apply to workers who have left the workplace and are called back to work. 

Where an employee is required to be on-call, they will be paid an additional allowance of 2% of the standard rate for weekdays, or 3.96% of the standard rate for public holidays. 

Read the full determination on the FWC website here.

How Humanforce can help

Award compliance must be a priority for any business, especially those with shift-based workplaces. Labour is a large component of operational costs so accurate pay and cost control is vital. 

The Humanforce Award Interpretation Engine has been built to be highly configurable and to suit any type of award or compliance requirements. We have a proven track record of implementing the SCHADS Award for customers in relevant industries with our Award Interpretation Engine. The engine ensures that complex conditions are automated so that all payments to employees are timely and accurate. In addition, Humanforce displays the award interpretation directly in the roster, highlighting overtime and providing accurate expected labour costs so you can stay in control.    

To find out more about how the Humanforce Award Interpretation Engine can help your organisation stay compliant with changing awards, schedule a demo, or contact us here.   

Humanforce is a leading provider of shift-based workforce management solutions that simplifies onboarding, scheduling, time and attendance, employee engagement, and communication. Customers in more than 23 countries use Humanforce to optimise costs, realise compliance confidence, empower their team, and drive growth. Humanforce was founded in Sydney in 2002, and today has offices across Australia, New Zealand, Singapore, and the UK. www.humanforce.com   

Disclaimer: This document contains general information and is also not intended to constitute legal or taxation advice. If you need legal or taxation advice, we recommend you speak to a qualified adviser.