SCHADS Sleepover Changes: What Employers Need to Know

The Fair Work Commission has confirmed significant changes to sleepover provisions under the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) [MA000100].

The changes apply from the first full pay period commencing on or after 1 June 2026 and may significantly impact how employers manage sleepover arrangements, including payroll calculations, rostering practices, overtime thresholds and shift loadings.

For employers in the disability, community services, aged care and home care sectors, understanding these changes is essential to maintaining SCHADS Award compliance and reducing underpayment risks.

Key SCHADS sleepover changes from 1 June 2026

The Fair Work Commission has confirmed the following changes:

• work performed immediately before and after a sleepover must be treated as part of the same shift

• the 8-hour sleepover period cannot be treated as a break between shifts for Award purposes

• by agreement, the minimum break between shifts connected to a sleepover may be reduced from 10 hours to 8 hours

• by agreement, sleepover arrangements may include up to 12 ordinary hours of work before overtime applies (previously 10 hours), provided no more than 8 ordinary hours are worked on either side of the sleepover

• shift loadings apply separately to each portion of work performed before and after the sleepover

• part-time and casual employees may have different overtime triggers where compliant written agreements are in place

Why do SCHADS sleepover changes matter?

The SCHADS Award is one of Australia’s most complex modern awards to interpret and apply correctly.

Sleepover arrangements have historically been a high-risk area due to the interaction between:

• ordinary hours of work

• overtime thresholds

• minimum breaks between shifts

• shift loadings

• sleepover allowances

• rostering practices

These changes are not simply a payroll adjustment. Employers may need to review how sleepovers are rostered, recorded and paid to ensure their systems align with the updated Award requirements.

Incorrect interpretation or payroll implementation may expose organisations to:

• employee underpayment claims

• backpay liabilities

• workplace disputes

• Fair Work compliance action

• penalties for Award breaches

Sleepovers must now be treated as part of the same shift

One of the most significant changes is confirmation that work performed immediately before and after a sleepover must be treated as part of the same shift.

The Fair Work Commission has also confirmed that the 8-hour sleepover period cannot be treated as a rest break between shifts.

This clarification may affect:

• overtime calculations

• roster design

• payroll coding

• fatigue management considerations

• compliance reviews

Employers should review existing sleepover arrangements to ensure work patterns and payroll settings reflect these changes.

Greater flexibility, but increased compliance complexity

The changes provide some additional flexibility for employers and employees.

By agreement:

• the minimum break between shifts connected to a sleepover may be reduced from 10 hours to 8 hours

• sleepover shifts may include up to 12 ordinary hours of work before overtime applies

However, strict limits apply.

No more than 8 ordinary hours may be worked on either side of the sleepover period.

Employers should carefully consider Award compliance, fatigue risks and operational requirements before implementing these arrangements.

How shift loadings apply under the new rules

A key change relates to how shift loadings are calculated.

Each portion of work performed before and after a sleepover must now be considered separately when applying relevant shift penalties and loadings.

For example:

• work performed before a sleepover may attract afternoon or evening shift penalties

• work performed after a sleepover may fall within ordinary hours and attract different loading requirements

Employers should review payroll settings and Award interpretation practices to ensure shift loadings are being applied correctly.

Changes to overtime thresholds for part-time and casual employees

The Fair Work Commission has also confirmed changes affecting overtime calculations for part-time and casual employees.

Where compliant written agreements are in place, overtime may not apply until more than 12 hours of rostered work is performed in connection with a sleepover arrangement.

Employers should review:

• employment agreements

• written flexibility arrangements

• rostering processes

• payroll configurations

to ensure they reflect the updated SCHADS Award requirements.

What employers should do now

Organisations using SCHADS sleepover arrangements should review their systems and processes to prepare for the changes.

Recommended actions include:

• reviewing current sleepover rostering arrangements

• checking payroll system settings

• reviewing overtime calculations

• confirming Award classifications and entitlements

• updating written agreement processes

• training payroll, HR and rostering teams

• seeking advice where Award interpretation is unclear

A proactive review can help identify potential compliance risks before they result in employee disputes or backpay obligations.

SCHADS compliance risks remain high

The Fair Work Ombudsman continues to focus on workplace compliance, particularly in industries where complex Award arrangements create a higher risk of payroll errors.

For employers covered by the SCHADS Award, sleepovers remain one of the areas requiring careful attention.

Even genuine payroll mistakes can create significant compliance issues if employees do not receive their correct entitlements.

Frequently asked questions about SCHADS sleepover changes

When do the SCHADS sleepover changes start?

The changes apply from the first full pay period commencing on or after 1 June 2026.

Can employers still roster sleepovers under the SCHADS Award?

Yes. However, employers should review rostering practices, payroll settings and agreements to ensure they comply with the updated requirements.

Will payroll systems need to be updated?

Many organisations may need to review payroll configurations, particularly around overtime calculations and shift loading rules.

Do employers need written agreements?

Written agreements are required where employers use certain flexibility provisions, including reduced breaks between shifts and extended ordinary hours arrangements.

Need support navigating SCHADS Award changes?

Workplace Plus provides practical SCHADS Award compliance support, including:

• payroll audits

• Award interpretation advice

• rostering reviews

• classification reviews

• manager and payroll training

• SCHADS Know Your Award training

Our workplace relations consultants can help organisations understand their obligations and apply the SCHADS Award correctly.

Contact Workplace Plus today for SCHADS Award compliance support.