Most award underpayments are not dishonest. They start with someone being placed on a classification level once, years ago, and never being checked again while their qualifications and duties moved on. This guide is the procedure for finding those errors before someone else does. For what the Fair Work Commission actually changed and when it bites, read Health Professionals Award: What Changes on 1 October 2026; this guide is how you do the work. For the wider picture, see the healthcare employment compliance pillar.
Before you begin
Get three things in one place: your employee list (including anyone casual or part-time), your payroll records showing what each person is actually paid, and the current version of each relevant award. Do not work from a summary or a payroll vendor's cheat sheet. Awards are varied regularly and the classification definitions are the part that changes.
Decide who owns this. In most practices it is the practice manager, but the person signing off needs the authority to approve back-pay if the audit finds a shortfall, because that decision should not be deferred once you know.
One framing point before you start: an award classification is determined by the work an employee actually performs, not by their job title, their contract wording, or what they were classified as when they were hired. That is the whole reason this audit finds things.
Step 1: Confirm which award applies to each employee
Start here, because a classification audit on the wrong award is wasted work. In a typical practice you may be dealing with more than one instrument at once:
- The Health Professionals and Support Services Award 2020 (MA000027) covers most allied health professionals plus the support services stream (reception, medical administration, practice assistants, dental assistants, pathology collectors).
- The Nurses Award 2020 usually covers registered and enrolled nurses, including practice nurses.
- Some employees may be award free, typically where they earn above the high income threshold and have a guarantee of annual earnings in place. Do not assume this; it is a narrow category.
Write the award against each name. Where you are unsure, the Fair Work Ombudsman's Pay and Conditions Tool will identify coverage from the role and industry.
Step 2: Build an evidence file for each employee
For every award-covered employee, collect the three inputs that drive a classification. This is the slow part of the audit and it cannot be skipped, because a classification decision without evidence behind it is just an assertion.
- Qualification held, and its level under the Australian Qualifications Framework. Under the Health Professionals Award, the entry level for each profession is anchored to a standard minimum qualification set out in Schedule B, expressed as an AQF level.
- Experience, in years within the profession, and where relevant in hours. Progression within Level 1 of the health professional structure turns on accumulated experience, using a threshold of 1,824 hours of similar experience.
- Duties actually performed, written down honestly. Not the position description as filed, unless you have confirmed it still describes the job.
Where a position description is out of date, this is the moment to fix it. A current position description is both the input to the classification decision and part of the evidence that the decision was reasonable.
Step 3: Map each employee to a classification level
Now open the award itself and work through the classification definitions in order, from the lowest level up, stopping at the level whose description genuinely matches the work.
Two rules keep this honest. First, read the whole level definition, not the heading. Levels are usually defined by a combination of qualification, supervision received or given, autonomy of judgement, and the complexity of the tasks. Second, where an employee performs duties across two levels, the general principle is that they are classified at the higher level if the higher-level duties are a genuine and regular part of the job rather than an occasional overflow.
If you employ dental assistants or pathology collectors, note that they are a special case right now: a new classification structure took effect for them on 1 April 2026, and the award contains a dedicated Schedule J (Classification Translation Arrangements) that tells you exactly which new level each existing employee moves to based on their previous level, qualifications and industry experience. Use Schedule J rather than mapping them from scratch.
Step 4: Compare the correct level against what you are actually paying
For each employee, put three numbers side by side: the minimum rate for the level you have just determined, the rate you are actually paying, and the difference.
Then go past the base rate, because this is where shortfalls usually hide. Check that the rate being paid also covers overtime, penalty rates, allowances, and annual leave loading for the hours actually worked. A flat rate above the award minimum does not automatically cover everything the award requires. If you pay an annualised salary, the award will usually require you to reconcile it against what the employee would have earned under the award, and to keep records of that reconciliation.
Where you find a gap, quantify it across the whole period the employee has been on the wrong level, not just the current pay cycle. Underpayments are recoverable for up to six years.
Step 5: Rectify anything you have found
If the audit found a shortfall, fix it, and fix it promptly. Calculate the back-pay owed, including superannuation on the underpaid amount and interest where applicable, and pay it. Correct the employee's classification in your payroll system so the error stops accruing from the next pay run.
Do not sit on a known underpayment while you decide what to do about it. The Fair Work Ombudsman treats voluntary rectification and cooperation as significant, and it is the difference between a fixed problem and an enforcement matter. Employers who self-report and cooperate are the ones offered an enforceable undertaking rather than facing court. Employers who ignore the issue after being told about it are the ones who get penalised: in February 2026 the operators of a Merrylands medical centre were fined $36,000 for deliberately failing to act on a Fair Work compliance notice about an underpaid registered nurse.
Step 6: Document the reasoning and book the review
For each employee, record the classification you landed on and why: the qualification relied on, the experience counted, the duties considered, and the level definition you matched them against. A short note per person is enough. This contemporaneous record is what you produce if a classification is ever queried by an employee or a Fair Work inspector, and it is far more persuasive than a reconstruction attempted two years later.
Then book the next review, because classifications drift. A person gains a qualification, takes on supervision, or absorbs duties from someone who left, and their correct level moves without anyone deciding it should. Put a recurring classification review in your compliance calendar, and add the dates you already know are coming: 1 October 2026 for the new health professional structure, 1 January 2027 for the support services second stage, and then 30 June in each of 2027, 2028, 2029 and 2030 for the remaining phased increases.
What good looks like
A completed classification audit leaves you with a single sheet per award-covered employee showing the award, the classification level, the evidence behind it, the applicable minimum rate, what you pay, and the date you last checked. Any gap found has been back-paid rather than noted. The recurring review is in the calendar with an owner.
The common mistakes are worth naming, because they are what the audit is designed to catch:
- Classifying by job title. The award follows the work performed, not what the role is called.
- Setting a level at hire and never revisiting it. Duties and qualifications move; classifications should move with them.
- Assuming a rate above the minimum covers everything. It may not cover overtime, penalties, allowances and leave loading.
- Applying the wrong award, most often by putting a nurse on the Health Professionals Award.
- Finding a shortfall and delaying. The liability grows and the regulator's view of you changes.
Frequently asked questions
How often should I audit award classifications?
At least annually, and always when an award is varied, when an employee's qualifications or duties change materially, and before any known commencement date. The current cycle makes this concrete: the new Health Professionals Award classification structure commences from the first full pay period on or after 1 October 2026, with further phased increases each year to 2030.
What if an employee's duties span two classification levels?
Read both level definitions in full. The general principle is that where higher-level duties are a genuine and regular part of the role rather than occasional, the employee is classified at the higher level. If the higher duties are truly incidental, the lower level may still be correct. Record the reasoning either way, because this is the kind of decision that gets questioned.
Do I have to back-pay if I find an underpayment?
Yes. An underpayment is a debt owed to the employee, recoverable for up to six years, and discovering it does not extinguish it. Calculate the shortfall, pay it with superannuation and any interest, and correct the classification so it stops accruing. Since 1 January 2025, intentional underpayment has been a criminal offence under the Fair Work Act.
Can I just rely on my payroll software to classify staff correctly?
No. Payroll systems apply the rate for whatever classification you enter; they do not decide whether that classification is correct. Both 2026 Fair Work enforceable undertakings against Southern Cross Care were root-caused to payroll and time-and-attendance systems that had never been configured correctly for the award. The classification decision is yours, and it needs evidence behind it.
Does this apply to casual and part-time employees?
Yes. Award classifications apply regardless of employment type. Casuals are classified at the same levels and then have the casual loading applied on top, and part-time employees are classified exactly as a full-time employee doing the same work would be. Include everyone in the audit.
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