The Fair Work Ombudsman will examine what drives rule-breaking in the disability services sector to identify systematic ways of changing business behaviour.
The ombudsman receives 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.
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.
It comes as the peak body National Disability Services warns the sector could be hurtling toward "market failure" as the National Disability Insurance Agency's "one-size-fits-all" pricing was resulting in support providers making losses.
6°C