Up to 400 current and past staff at Capecare Busselton and Dunsborough will be back paid this month after a new team member discovered payroll errors that started in 2014.
The not-for-profit care home has advised it will pay the owed money with interest to the affected employees.
CEO Joanne Penman said Capecare's Board regretted the error and was in the process of contacting all the affected staff.
"Following a rigorous investigation, the main cause was determined to be inconsistencies of award interpretations in our systems," she said.
Capecare Chair Martha Ryan said the Board took the discovery of the payroll errors 'extremely seriously'.
"We sincerely apologise to affected staff and Capecare is doing its best to compensate staff as quickly as possible.
After discovering the potential errors, Ms Ryan said the Board and Management appointed independent auditors KPMG to undertake a review.
Capecare has self-reported its non-compliance to the Fair Work Ombudsman, advising that it had incorrectly applied clauses of the Nurses Award 2010 and the Aged Care Award 2010.
Ms Penman, who commenced with Capecare in October 2021, said the organisation was taking every reasonable measure to prevent the error from happening again.
"We are implementing a number of new procedures and systems, including investing in a new HR information system to measure time and attendance; outsourcing the payroll function; utilising a Compliance Officer to monitor changes to awards and national employment standards; developing an internal payroll audit process; and introducing annual external payroll audits."
A spokesperson advised the affected staff will be contacted via mail and phone and advised of the monies owed and the process for repayment.
Capecare has been established for 60 years and is an independent community organisation, existing to serve the needs of older people in the Capes Region.
