Making Sense Of Workplace Relations Changes In The Non-For-Profit Sector
If you work in the not-for-profit (NFP) sector, you know that workplace relations can feel like a maze, and in 2025, that maze just got more complex.
From sleepover provisions under the SCHADS Award to the Fair Work Ombudsman’s (FWO) push for payroll remediation, these aren’t minor tweaks. They impact how you roster, pay and protect your organisation’s reputation.
So, what’s changed, and what does it mean for you? Let’s break it down in plain English.
Sleepovers under the SCHADS Award: what’s really going on?
For years, sleepover rules under the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) have been confusing. If you employ staff in disability services, youth work or community care, you’ve probably felt that pain.
Here’s the short version: a sleepover is when an employee stays overnight at a client’s premises, mainly to be there if needed, not to work continuously. Employers must provide accommodation, meals and basic facilities. Employees get a sleepover allowance and, if they work during that time, overtime rates apply.
Sounds simple? Not quite. The big question has been whether sleepovers count as part of a continuous shift. Historically, the FWO said yes, which meant shift penalties like the 15% night shift allowance could apply to the whole period, even when the employee wasn’t actively working. For many NFPs, that meant extra costs.
Enter the Federal Court’s decision in Jats Joint Pty Ltd v Fair Work Ombudsman [2025] FCA 743. The Court ruled that sleepovers are separate from ordinary shifts and don’t attract shift penalties. So, if your employee works before or after a sleepover, those hours are treated as ordinary shifts, not one long shift with penalties attached.
Payroll compliance: why it’s a big deal right now
If the word “underpayment” makes you nervous, you’re not alone. Recent headlines show even big organisations can get payroll wrong, and the fallout is expensive and damaging.
The FWO’s new Payroll Remediation Program Guide is a clear signal… compliance is non-negotiable. Here’s what the guide says in plain terms:
- Review deeply. Six years is the minimum look-back period, not the maximum.
- Use real data. Base calculations on actual work patterns, not assumptions. Fill gaps with IT logs or service records.
- Favour employees. If in doubt, give employees the benefit. Overpayments can’t offset underpayments, and each entitlement must be treated separately.
- Communicate openly. Be transparent, even if you don’t have all the answers yet. And don’t make confidentiality a condition of payment; it won’t bind the FWO anyway.
- Add interest to back payments. It shows accountability and can influence enforcement decisions.
- Fix the root cause. Interim measures are fine, but long-term solutions system upgrades, audits, training are essential.
- Consider self-reporting. It’s not mandatory, but early disclosure can lead to better outcomes. Just get advice first.
Why does this matter for NFPs? Because many operate on tight budgets and lean HR teams. Payroll errors can snowball quickly, especially with complex awards like SCHADS. Proactive compliance isn’t just about avoiding penalties it’s about protecting your mission and your people.
What should NFP leaders do now?
Feeling overwhelmed? That’s normal. But here’s the good news: awareness is your first step. And with the right approach, you can turn compliance into a strength.
Start by asking:
- Do we understand the current interpretation of sleepover provisions?
- Have we reviewed our payroll systems recently to ensure sleepovers are coded correctly—separate shifts with appropriate allowances, overtime and minimum hours?
- Have we updated our rostering practices and ensured staff employment agreements / contracts reflect these changes in allowance and shift structures
- Are our classification and rostering practices aligned with the SCHADS Award?
- Do we have a remediation plan if issues arise?
If any answer is ‘not sure’, now’s the time to act. Seek professional guidance, particularly if your organisation has been using the FWO’s prior interpretation or has received a compliance notice. Prevention costs less than remediation – every time.
Looking ahead… stay agile, stay informed
The NFP sector is unique. You’re balancing compliance with care, budgets with impact. That’s why changes like these matter they affect not just your bottom line but your ability to serve communities.
the Jats Joint judgment is directly applicable to NFP organisations covered by the SCHADS Award. It reshapes how sleepovers, shift continuity, night loading and pay entitlements are managed. NFPs providing care services should proactively align policies and payroll with this precedent. Keep an eye on the FWO’s appeal and any FWC award variations that may follow.
The takeaway? Stay agile. Monitor developments like the Jats Joint appeal and the Fair Work Commission’s review. Keep an eye on FWO guidance. And most importantly, embed compliance into your culture, not as a box-ticking exercise, but as part of your commitment to fairness and integrity.
Because workplace relations aren’t just about awards and allowances. They’re about people—the employees who deliver your mission and the communities who rely on you. Getting it right matters.
Ready to turn these insights into action?
We’ve created a practical Workplace Relations Compliance Checklist for NFPs (2025) to help you stay on top of sleepover provisions, payroll compliance and more.
Need help navigating these changes?
Whether it’s interpreting the SCHADS Award or implementing payroll remediation, expert advice can save you time, money, and stress. Don’t wait for an audit or a compliance notice – start the conversation now.
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Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not intended to be legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice concerning your specific situation.
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