SCHADS Award Sleepover Changes from 1 June 2026

The Fair Work Commission (FWC) has finalised significant changes to the sleepover provisions in the Social, Community, Home Care and Disability Services Award 2010 (SCHADS Award). The changes took effect from an employee’s first full pay period on or after 1 June 2026.

This alert addresses those key changes, which will likely require employers to immediately update their payroll and rostering practices (see further below).

Background

For many years, the SCHADS Award has not clearly addressed how sleepovers interact with:

• the minimum break between shifts;
• whether work performed before and after a sleepover is one continuous shift or multiple shifts; and
• when overtime should be triggered.

As a result, the sleepover provisions have been widely recognised as ambiguous and uncertain, and their correct interpretation has been heavily contested – with many employers adopting rostering and payroll practices to align with advice provided by the Fair Work Ombudsman (FWO), which was subsequently called into question by the Federal Court.

Accordingly, the recent amendments are intended to provide a clearer picture for how sleepover arrangements operate under the SCHADS Award by:

• clarifying that work performed immediately before and after a sleepover forms part of a single shift and that a sleepover period does not operate as a break between shifts;
• clarifying how shift loadings apply separately to work performed before and after a sleepover; and
• introducing additional flexibility (by agreement) in how sleepover shifts can be rostered.

Key Changes

Breaks between shifts

As you are no doubt aware, the SCHADS Award requires a minimum 10-hour break between shifts (which may be reduced to 8-hours by agreement in sleepover scenarios).

For many years, there has been ambiguity as to whether the sleepover period counted as a break between shifts. Historically, the FWO’s publicly available guidance on this issue was to the effect that the sleepover period did not count as the requisite break. However, earlier this year, the Full Federal Court rejected that contention – meaning that employers who have used the sleepover period as a break between shifts were in fact compliantly rostering employees, despite the FWO’s interpretation.

The FWC’s amendments now vary the SCHADS Award to change that, accordingly, going forward:

• any work performed either immediately before and/or after a sleepover forms part of the same shift, and
• the sleepover period itself does not count as a break between rostered work.

For many employers who historically adopted the FWO’s guidance, this change is unlikely to be significant. However, for employers that utilised the sleepover period to satisfy the SCHADS Award’s requirements for a break between shifts, this is a significant change that will require roster redesign (or risk significant overtime exposure).

For completeness, we note that following the end of the sleepover shift, employees must be released for a minimum break of 10 hours (unless an explicit agreement has been reached to reduce that period to 8-hours).

Example: Old vs New Rules

* Assumes no 12-hour agreement – so that overtime applies after 10 ordinary hours (see further below).

The amendments also clarify that overtime is assessed per day or per shift, to include where a shift spans two calendar days (which is commonly the case with sleepovers).

New flexibility for 12-hour sleepover shifts

Employers and employees will now be able to agree to work up to 12 ordinary hours in a shift that includes a sleepover, paid at ordinary rates.

Under the new provisions:

• a shift involving a sleepover can include up to 12 ordinary hours of active work;
• no more than 8 consecutive ordinary hours can be worked on either side of the sleepover; and
• overtime rates apply once the agreed 12 ordinary hours are exceeded.

For example, an employee could agree to work 6 hours before the sleepover and 6 hours after the sleepover without overtime applying to any of those hours. However, where there is no prior explicit agreement to work a 12-hour sleepover shift, the usual 10-hour limit continues to apply, and overtime will apply after 10 hours of work.

Example: 12-hour Sleepover Shift

Shift penalties and loadings will change

While the standard sleepover allowance will continue to apply separately as a flat allowance, work performed before and after the sleepover will be treated separately for the purpose of applying shift loadings.

This means the shift may have different shift allowances that apply for the two periods of work either side of the sleepover.

Why these changes matter

These amendments are particularly important for employers operating residential care, disability support, home care and youth services where sleepover arrangements are common.

While the changes provide greater rostering flexibility, they may also create additional payroll complexity and overtime risk, particularly in organisations that have historically utilised the sleepover period as a break between shifts.

What you should do now

With the changes commencing from the first full pay period on or after 1 June 2026, employers who utilise sleepover arrangements should urgently review their existing rostering, payroll and contractual arrangements to ensure compliance.

Employers should review whether their employment contracts and onboarding documentation adequately support the new 12-hour sleepover flexibility (and minimum break requirements). As the extended ordinary hours arrangement depends upon explicit employer and employee agreement, organisations may wish to:

• update employment contracts for affected employees;
• implement written sleepover or rostering agreement processes; and/or
• review policies and rostering practices to ensure they align with the amended SCHADS Award provisions.

However, when implementing these changes by agreement, it will also be important to have regard to other recent Federal Court decisions that identified more onerous requirements for establishing employee agreement (in the Coles/Woolworths FWO prosecution).

Payroll and rostering systems should also be reviewed to ensure they correctly:

• treat agreed adjoining work periods as part of the same shift for overtime purposes;
• separately apply the correct shift penalties before and after the sleepover period; and
• do not treat the sleepover period as a break between shifts.

These changes are not retrospective and will only apply from the first full pay period on or after 1 June 2026. However, employers should ensure any necessary contractual, rostering, and payroll changes are implemented as soon as practicable.

There are ongoing proceedings relating to other aspects of the SCHADS Award, including revision of its classification structure and wage rates. We will continue to monitor developments and provide further updates as required.

If you would like assistance reviewing your rostering arrangements, employment contracts, or payroll compliance in light of these changes, please contact the HMB team at admin@hmblaw.com.au.