Community organisations are facing their toughest employment law challenges yet.
Here's what's changed in 2025: new criminal penalties for wage theft, expanded right to disconnect laws, and major SCHADS Award restructuring.
But here's what hasn't changed: your mission to serve the community with excellence.
This guide provides practical, tested strategies to transform these challenges into competitive advantages. You'll discover how to build robust employment practices that protect your organisation, support your staff, and strengthen your community impact. ⬇️
The Fair Work Situation in 2025
From January 1, 2025, intentional wage underpayment became a criminal offence, carrying penalties of up to $7.825 million for companies or 10 years imprisonment plus $1.565 million for individuals. This is the new reality under the Fair Work Legislation Amendment (Closing Loopholes) Acts.
The numbers
The Australian Community Sector Survey reveals the sector's precarious position:
- 68% of community sector leaders report insufficient government funding for operational stability
- 60% observe increased competition for funding over the past 12 months
- Community sector workers manage 25+ cases simultaneously, creating unprecedented workplace pressure
- Over 2.1 million people work in Health Care and Social Assistance industries, making this Australia's fastest-growing employment sector
But here's what the statistics miss: the human cost. Research from the Social Policy Research Centre at UNSW Sydney demonstrates that community service organisations face a "squeeze on resources" precisely when demand for services peaks, creating employment law violations that often stem from desperation rather than deliberation.
What's new in 2025: the big three changes
Under section 327A of the Fair Work Act, community organisations now face criminal prosecution for intentional underpayments. The legislation targets employers who:
- Intentionally fail to pay required amounts (wages, superannuation, allowances)
- Know or are reckless about underpayment consequences
- Fail to remedy discovered underpayments within reasonable timeframes
The penalties:
- Companies: Up to $7.825 million fine
- Individuals: Up to 10 years prison + $1.565 million fine
What "intentional" means:
- Knowing you're underpaying and doing it anyway
- Being reckless about whether you're paying correctly
- Discovering underpayments and failing to fix them promptly
Your action: Audit your payroll systems now. "I didn't know" is no longer sufficient protection.
2. SCHADS Award Major Changes
The Social, Community, Home Care and Disability Services Industry Award (SCHADS) underwent major restructuring in January 2025, creating new compliance obligations:
New Classification Structure (Effective January 1, 2025):
- All aged care workers hired after January 1, 2025 must be classified under new Schedule F descriptions
- Existing workers transition under Schedule G provisions
- Some classifications receive "red circle" protection where previous rates exceed new classification rates
Phased Wage Increases:
- Increases exceeding 3%: implemented 50% on January 1, 2025, remainder October 1, 2025
- Increases under 3%: full implementation January 1, 2025
- Additional 3.5% increase effective July 1, 2025 (National Minimum Wage Review)
What this means for you: Check every aged care and disability worker's classification and pay rate. Mistakes could now trigger criminal investigations.
From August 26, 2025, small businesses (under 15 employees) must comply with right to disconnect laws. For community organisations, this creates unique challenges:
The exceptions: Contact is still allowed if refusing would be "unreasonable."
What's reasonable depends on:
- Why you're contacting them
- How much it disrupts their personal time
- Their role and seniority
- Whether they're paid to be available
- Their personal circumstances
Your deadline: Update policies and contracts before August 26, 2025.
How Creating a Community-Based Organisations Can Counter Fair Work Issues
Most organisations claim to be "community-based" because they serve the community. But there's a crucial difference between serving the community and being embedded within it.
Traditional service model: You deliver services TO the community
Community-based model: You operate WITH and WITHIN the community as an integral part of its fabric
The key characteristics of genuinely community-based organisations:
🔗 Shared ownership: Community members have genuine voice in governance and decision-making
🌐 Local integration: Staff, volunteers, and leadership are drawn from the community served
🤝 Mutual accountability: The organisation is accountable to the community, not just funding bodies
💡 Collaborative problem-solving: Issues are addressed through community wisdom and collective action
🎯 Values alignment: Organisational values genuinely reflect community values and priorities
Why this approach prevents Fair Work issues
1. Early warning systems built in
When your staff are community members and your volunteers are their neighbours, workplace issues don't stay hidden. Community-based organisations benefit from natural early warning systems:
- Staff are more likely to raise concerns before they escalate
- Community members notice when something's "not right" with working conditions
- Informal networks provide multiple channels for issue identification
- Local reputation matters more than distant compliance reports
2. Community accountability creates natural compliance
Community-based organisations face a unique form of accountability: they have to look their community in the eye every day.
This creates powerful incentives for fair employment practices:
- Reputation protection: Bad employment practices become community knowledge quickly
- Recruitment advantages: Fair employers attract the best local talent
- Client trust: Families trust organisations that treat staff well
- Volunteer engagement: Community volunteers expect fair treatment of paid staff
3. Collective problem-solving reduces disputes
When employment issues arise, community-based organisations can draw on community wisdom and collective action:
- Mediation resources: Community elders, respected leaders, or local professionals often volunteer mediation services
- Shared solutions: Other local organisations may have faced similar challenges and can share solutions
- Community pressure: Fair resolution becomes a community expectation, not just a legal requirement
- Collective advocacy: The whole community benefits when one organisation gets employment practices right
How to Build Community-Based Employment Excellence
The COMMUNITY Framework
We've developed a framework specifically for building community-based approaches to Fair Work compliance. Think of COMMUNITY as your blueprint for embedding employment excellence within community relationships:
C - Community Governance Integration
Embed employment oversight within community governance structures.
Instead of treating employment issues as internal management concerns, genuinely community-based organisations integrate employment oversight into their community governance:
Community employment committees: Include community representatives (not just staff) in employment policy development and issue resolution.
Example structure:
- 2 community representatives (nominated by community)
- 1 staff representative (elected by employees)
- 1 volunteer representative
- CEO or senior manager
- External advisor (employment lawyer, HR professional)
Why this works:
- Community perspective prevents insular thinking
- Shared ownership of employment standards
- Natural mediation capacity when issues arise
- Community accountability for fair practices
Your action steps:
✔️ Review current governance structure
✔️ Identify respected community members for employment oversight
✔️ Develop terms of reference for community employment committee
✔️ Schedule quarterly employment practice reviews
O - Organic Workforce Development
Grow your workforce from within the community you serve.
Community-based organisations prioritise developing local talent rather than importing expertise:
Community-first recruitment:
- Advertise locally before broader markets
- Partner with local training providers for skills development
- Create pathways from volunteer to employee roles
- Prioritise lived experience alongside formal qualifications
Local mentorship programs:
- Pair new staff with experienced community members
- Create advisory roles for community elders or leaders
- Develop succession planning that prioritises internal promotion
- Invest in training community members for leadership roles
Benefits for Fair Work compliance:
- Staff understand and embody community values
- Long-term relationships reduce conflict likelihood
- Community investment in staff success
- Natural cultural competency and appropriateness
M - Mutual Support Networks
Create reciprocal relationships with other community organisations.
Community-based organisations don't compete – they collaborate:
Shared resources approach:
- Pool employment law expertise across multiple organisations
- Share training costs and professional development
- Create mutual aid agreements for crisis support
- Develop common employment standards within community
Cross-organisation learning:
- Regular forums for sharing employment challenges and solutions
- Peer mentoring between HR managers across organisations
- Joint advocacy for community sector employment improvements
- Shared celebration of employment excellence achievements
M - Mission-Driven Employment Practices
Align employment practices with community mission and values.
Community-based organisations don't just follow employment law—they embed community values into every employment practice:
Values-based policies:
- Connect pay equity to community values of fairness
- Link workplace flexibility to community understanding of family obligations
- Integrate cultural practices into workplace routines
- Ensure employment practices reflect community priorities
Mission integration examples:
- Disability services: Create employment opportunities for people with disabilities within the organisation
- Youth services: Develop traineeships and apprenticeships for young people in the community
- Family services: Implement family-friendly policies that model healthy relationships
- Cultural services: Incorporate cultural protocols into workplace practices
Why this prevents disputes:
- Staff feel aligned with organisational purpose
- Community expectations create natural accountability
- Values-based practices go beyond minimum legal requirements
- Mission connection increases staff tolerance for challenges
U - Understanding Through Lived Experience
Prioritise lived experience in leadership and decision-making.
Community-based organisations understand that the people most affected by issues often have the best solutions:
Lived experience in governance:
- Include service users in governance structures
- Create advisory roles for people with direct experience of services
- Ensure decision-making bodies reflect community diversity
- Value experiential knowledge alongside professional expertise
Employment practice benefits:
- Policies reflect real-world community needs
- Natural understanding of appropriate workplace flexibility
- Built-in cultural competency and sensitivity
- Reduced likelihood of discriminatory practices
N - Networked Problem-Solving
Leverage community networks for employment issue resolution.
When problems arise, community-based organisations have access to rich networks of support and wisdom:
Community mediation resources:
- Respected community elders who can facilitate difficult conversations
- Local professionals willing to provide pro bono mediation services
- Peer organisations that have faced similar challenges
- Community leaders who can provide perspective and guidance
Networked support systems:
- Informal networks that provide early problem identification
- Community pressure for fair and reasonable resolution
- Shared resources for addressing systemic issues
- Collective advocacy for sector-wide improvements
I - Integrated Service and Employment Excellence
Recognise that good employment practices enhance service delivery.
Community-based organisations understand that staff wellbeing directly impacts community wellbeing:
Service-employment integration:
- Link staff professional development to service quality improvements
- Connect workplace satisfaction to client satisfaction
- Integrate employment excellence into service planning
- Measure employment practices as part of community outcomes
Quality enhancement through employment excellence:
- Fair employment practices model healthy relationships for clients
- Staff stability improves service continuity and quality
- Good working conditions reduce staff stress and improve client interactions
- Employment excellence becomes part of community development
T - Trust-Based Accountability
Build accountability systems based on community trust rather than external compliance.
Community-based organisations are accountable to their community first, regulations second:
Trust-based systems:
- Regular community reporting on employment practices
- Open book approaches to wage and condition information
- Community feedback mechanisms for employment concerns
- Transparent decision-making processes
Benefits:
- Higher standards than minimum legal requirements
- Community ownership of organisational success
- Natural motivation for continuous improvement
- Reduced need for external oversight and monitoring
Y - Yielding Long-term Community Benefit
Focus on sustainable employment practices that benefit the whole community.
Community-based organisations think generationally, not just operationally:
Long-term thinking:
- Career development pathways that keep talent in the community
- Training investments that benefit the broader community
- Employment practices that model best practice for other local employers
- Succession planning that builds community leadership capacity
Community development through employment:
- Every good job created strengthens the community
- Fair employment practices raise standards for all local employers
- Training and development builds community capacity
- Employment excellence demonstrates community values in action
The bottom line
In an era of increasing social fragmentation and institutional distrust, community-based organisations have an opportunity to model a different way of working – one where employment excellence emerges from community relationships rather than external compliance.
Your community needs you to succeed. They need an employer that demonstrates their values, creates opportunities for their members, and contributes to their collective wellbeing. They need an organisation that treats employment as community development and Fair Work compliance as community care.
Want more HR insights for community organisations? Explore the SubscribeHR Blog! 📚 Templates, guides, and expert insights for community organisations