At least a third of community and social services workers are being underpaid, according to a University of NSW study released on Thursday.
The report uncovered "systemic" pay violations in the sector, which includes domestic violence workers, disability support workers, and other frontline employees.
Lead author Natasha Cortis, the university's Social Policy Research Centre associate professor, said many employees who were interviewed did not know what they were legally entitled to under their respective award wages.
Dr Cortis said the employees were routinely working above their pay grade while being kept at a lower pay classification.
She said that could partially be due to the ambiguous wording of the award classifications, resulting in highly qualified workers being under-classified.
However, Dr Cortis said most of these cases were unlikely to be accidental, since the errors overwhelmingly skewed towards underpayment rather than overpayment.
"It doesn't really look like individual mistakes here, it looks systemic and institutionalised to us," she said.
"There's an issue around the award wording which makes it very easy for employers to under-classify and misrecognise skills.
"For this industry, it's kind of like a dirty secret that the pay rates are so low for highly skilled work."
Dr Cortis said it was the largest study of community service workers in Australian history, tracking 3,122 employees in non-government sectors.
She said 30 per cent were under-classified in at least two out of three categories which determined award classification, making them "highly likely" to be underpaid.
However, Dr Cortis said the real figure could be much higher since 67 per cent were under-classified in at least one of the categories, meaning they were possibly being underpaid.
Disability support workers were the most likely to be undervalued, with 52 per cent being under-classified in at least two categories.
The report was written by the UNSW Social Policy Research Centre for the Australian Services Union (ASU).
ASU member and Chilean immigrant Katia Munoz has worked as a family and domestic violence worker in Australia for 20 years.
The single mother currently works with alcohol and other drug-impacted clients, specialising in support with parenting skills, in the Australian Capital Territory.
Ms Munoz said during her career she had seen colleagues leave the family and domestic violence services industry due to chronic underpayment issues.
She did not know what remuneration she was legally entitled to until she joined her union.
"I've been working for 20 years now and, as a community services worker, I've been underpaid," Ms Munoz said.
"Our skills and our jobs are not valued — they look down on us like a practical worker, but it's not like that at all.
"There's a lot of gaps that undermine workers, because they don't have the power and they accept what's being offered."
ASU assistant national secretary Emeline Gaske said the report was an indictment on the heavily female-dominated industry.
"There is a fundamental loophole in the system that unscrupulous employers are exploiting to lower costs," she said.
"Services are repeatedly turning away women escaping family and domestic violence due to insufficient workforce capacity, yet the way we treat workers is a huge disincentive to work in the sector and stay.
"If we want to ensure that our communities receive the support they need, we must pay people appropriately and recognise the value of the work they do."
The report recommends amending the Social, Community, Home Care and Disability Services Industry Award with clearer wording to reduce cases of underpayment.
An Australian Department of Social Services spokesperson said the government was working to improve conditions for community sector workers.
"The Australian government appreciates the critical role social and community services workers play in looking after fellow Australians, including the most vulnerable members of our community," the spokesperson said.
"The Department of Social Services continues to work closely with key stakeholders to ensure improvements in the sustainability of the community sector translate into better pay and conditions for community sector workers."
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