From 1 June 2026, the SCHADS Award treats a sleepover as part of one continuous shift, not a break. Employees can agree in writing to work up to 12 ordinary hours before overtime. Penalties now apply to each active work period. Employers must audit rosters, update payroll, review contracts, and document agreements.
Key takeaways
- New clause 25.4 ends the old approach: a sleepover no longer counts as a break between shifts. The work either side forms one continuous shift with separate active work periods.
- The overtime threshold around sleepovers moved from 10 to 12 ordinary hours. It requires a separate written agreement.
- Penalties now apply to each active work period, not the combined span. This removes the inflated loadings that made sleepover rosters uncommercial against the NDIA fee schedule.
- Getting the changes wrong can amount to wage theft under the Fair Work Act. That now carries criminal as well as civil consequences.
- Workplace lawyers advising the sector expect nine out of ten providers to change how they roster.
What is the SCHADS Award and who does it cover?
The Social, Community, Home Care and Disability Services Industry Award 2010 (MA000100) covers four employee streams. They are social and community services, home care, crisis accommodation, and family day care. It covers most NDIS providers, disability services, in-home aged care, and community services organisations in Australia.
The SCHADS Award attracts more litigation than almost any other modern award. Its terms cover a huge range of work, which leaves wide room for interpretation. That ambiguity drove the changes that took effect on 1 June 2026.
The Fair Work Commission may yet amalgamate the four streams because of persistent classification problems. The Commission has published nothing so far, so work from the award as it stands today.
What changed in the SCHADS Award on 1 June 2026?
Four things changed. A sleepover no longer counts as a break between shifts. Employees can agree in writing to extend ordinary hours around a sleepover to 12 before overtime. Penalties now apply to each active work period, not the whole span. Overtime now applies per day or per shift.
Here is each change in more detail.
1. Sleepover shifts are not a break
New clause 25.4 settles the question. A sleepover does not count as a break between shifts. The work immediately before and after it forms one continuous shift with separate active work periods. This ends years of conflicting decisions between the Federal Court and the Fair Work Commission.
2. A new 12-hour overtime threshold by agreement
Clause 25.1(c) lets an employer and employee extend the ordinary hours attached to a sleepover. They can agree to up to 12 hours in total before overtime applies, up from 10. The agreement must be separate and in writing, and the employee can decline.
3. Shift penalties apply per active work period
Payroll must now assess each active period of work on its own. A 2pm to 10pm shift before a sleepover attracts the 12.5 per cent afternoon loading. The 6am to 10am shift after it is simply an unloaded day shift. Previously, a 15 per cent night loading could stretch across the entire 20-hour span, plus overtime. That made these rosters wildly expensive and out of step with the NDIA fee schedule.
4. Overtime applies per day or per shift
Clause 28 now frames overtime per day or per shift. An employee who works across midnight keeps their entitlement even though the date changes mid-shift. The rates themselves did not move. Overtime remains time and a half for the first three hours, then double time, with separate weekend penalties.
Why did the SCHADS sleepover rules change?
The changes resolve a long legal conflict. The Federal Court said sleepovers did not form part of a shift. The Fair Work Commission disagreed, and a full Federal Court appeal confirmed the award read two ways. The Commission’s final determination rewrote the clauses from 1 June 2026.
The practical driver mattered just as much. A sleepover worker is often the only employee on site overnight. They must stay ready to provide active care at any moment. Yet a loaded 20-hour span produced labour costs that providers could not bill. The new rules recognise both realities.
What do employers need to do now? The compliance action checklist
Employers covered by SCHADS should work through seven actions. Audit sleepover rosters. Update payroll configuration. Review every contract, including casuals. Check enterprise agreement consistency. Train payroll and rostering staff. Prepare written template agreements. Seek legal advice on anything ambiguous.
In practice:
- Audit your sleepover rosters. Most providers will need to restructure rosters. The goal is balancing commerciality with the new entitlement calculations.
- Update your payroll system. Penalty calculations must run per active work period, not across the combined span.
- Review employment contracts for all employees, including casuals. Casuals receive casual loading in lieu of shift loadings. Contracts need to reflect that structure correctly.
- Check your enterprise agreement. Where the award now provides a better entitlement, you must provide it, even if your EBA says otherwise.
- Train payroll, HR, and rostering staff. Everyone who touches rosters or pay needs to understand the per-period calculation and the new overtime threshold.
- Prepare written template agreements. The 12-hour arrangement requires documented mutual consent. That usually means an IFA or a contract variation.
- Seek legal advice. General HR guidance is no substitute for advice on a notoriously ambiguous award.
Most providers struggle to track who has signed which agreement and acknowledged which policy version. A purpose-built HR compliance platform with document e-signing and acknowledgement tracking automates that evidence trail.
How should providers roll the changes out across the business?
Treat the rollout as three workstreams. Payroll recalculates penalties per work period. Rostering restructures sleepover patterns. People operations issues the updated policies and agreements, captures acknowledgements, and embeds the new documents into onboarding. That way every future hire receives the current versions automatically.
Most providers have payroll and rostering software well sorted. The consistent gap is people operations. Can you prove every employee acknowledged the new policy? Can you show when each IFA went out? Does the latest contract version flow into onboarding workflows without manual updates? This kind of award change exposes exactly that gap. Close it before an audit or underpayment claim does it for you.
Related reading: SCHADS Award Changes June 2026: What NDIS Providers Need to Do Now covers the implementation timeline in more detail.
Frequently asked questions
When did the SCHADS Award changes take effect?
The final changes took effect on 1 June 2026 under a Fair Work Commission determination. They ended years of conflicting Federal Court and Commission decisions about sleepovers and breaks. Apply the new rules from the first full pay period on or after that date.
Do sleepover shifts still attract the sleepover allowance?
Yes. The allowance remains 4.9 per cent of the standard rate. Employees also receive payment for any active work they perform during the sleepover. Once active work reaches 30 minutes, minimum engagement rules apply, so the employee may qualify for a longer paid period.
Did SCHADS overtime rates change in 2026?
No. Overtime remains time and a half for the first three hours and double time after that. Weekend penalty rates also stay the same. What changed is the trigger, including the new 12-hour ordinary hours threshold available by written agreement around sleepovers.
Do casual employees get shift loadings under SCHADS?
No. Casual employees receive their casual loading in lieu of shift loadings. Check casual contracts to confirm the loading structure under the new rules. Payroll now assesses penalties per active work period, and errors flow straight into underpayment exposure.
What happens if my enterprise agreement conflicts with the new SCHADS rules?
The better entitlement wins. If your EBA derives from the SCHADS Award and the award now provides a better entitlement, employees must receive it. Older agreements will not reflect the changes, so run a comparison review against the new clauses.
About the author
Graham Martin is the co-founder of Worknice, an Australian HRIS for NDIS and community services providers. The platform automates onboarding, document acknowledgements, and compliance tracking. This article draws on a June 2026 webinar Graham co-presented with Isabella Turner, workplace lawyer at Chamberlains. It is general information, not legal advice.
Sources
- Fair Work Commission. “Social, Community, Home Care and Disability Services Industry Award 2010 (MA000100).” https://library.fairwork.gov.au/award/?krn=MA000100
- Fair Work Ombudsman. “Social and community services industry.” https://www.fairwork.gov.au
- Turner, I. and Martin, G. “Getting SCHADS Right in 2026.” Chamberlains Law Firm and Worknice webinar, June 2026.
