Rampant rule-breaking is going unnoticed within Australia's disability support sector, an industry body says as the workplace watchdog launches a probe into rogue conduct.
Less than three per cent of Australia's 260,000 NDIS providers are registered, peak body National Disability Services notes as it welcomes the investigation announced on Tuesday by the Fair Work Ombudsman.
"We do not know what is occurring in the unregistered market, because there is no oversight so seeking to understand that is a positive thing," chief executive Michael Perusco told AAP.
His organisation has heard of countless instances of poor quality and unregistered providers exploiting staff and participants, he said, also praising the probe for shining a light on those practices.
The ombudsman has received tens of thousands of inquiries, anonymous reports, requests for assistance and self-reported breaches each year.
Back-payments for workers were close to $68 million between 2020 and 2024, equating to about $13.6 million every year.
The peak body has pushed for all National Disability Insurance Scheme providers to be registered in a proportionate system, where regulatory burdens would be higher for services completing complex work.
"In the absence of that reform, we are concerned that unsafe practices are going unnoticed," Mr Perusco said.
Previous investigations have uncovered widespread and large scale non-compliance in the sector, with ombudsman Anna Booth holding "serious" concerns.
The ombudsman aims to identify the root causes of non-compliance then work with industry and government to improve compliance.
Key themes of breaches are small and unregistered providers, higher labour costs, an uptick in digital gig platform providers and financial pressures, the ombudsman said.
Workers say they face strong demand for their services, high levels of casualisation in a predominantly female workforce, quick staff turnover and tight profit margins.
Ms Booth said the sector had relied heavily on migrant workers who are vulnerable to exploitation due to their reluctance to complain, despite having the same rights as other workers.
But she warned change won't be instantaneous.
The inquiry has been welcomed by the Australian Services Union, the largest group representing disability support workers.
"It often feels like a 'whack-a-mole' exercise with underpayments popping up all over the place in this rapidly growing sector," union spokesman Angus McFarland said.
The inquiry's first phase will run for 18 months and involve hearing from workers, stakeholders and clients who require disability support.
