We get it – record keeping is not the most exciting subject.
However, burying your head in the sand about your requirements to keep employment records can result in costly infringements or contraventions.
Employers are legally required by the Fair Work Act (2009) to keep detailed records of pay, hours worked, superannuation, leave and other employee information and entitlements. If no one in your business is responsible for maintaining and regularly checking these records, you’re in breach of Fair Work obligations – even if you’re doing everything else correctly.
Missing, outdated, falsified or poorly kept records are a major compliance risk and can severely impact your ability to respond to audits, employee disputes and claims of underpayment.
Let’s look at your requirements as a business owner when it comes to record keeping.
What are my record keeping obligations?
As a business owner with employees, workplace laws require you to make and keep accurate records for all of your employees. You are also legally obligated to issue pay slips to each of your employees.
Australia has strict record keeping and pay slip obligations to ensure all workers receive their correct wages and entitlements.
When it comes to employee records, the business owner must make and have access to a range of information for each employee, as prescribed by the Fair Work Act and Fair Work Regulations.
This includes:
- General records
- Pay records
- Hours of work records
- Superannuation payments
- Leave records
- Termination records
and more.
What’s more, these records must be kept for seven years, be easily accessible to a Fair Work inspector, be legible and written in English. They must not be false or misleading to your knowledge and cannot be altered unless an error needs updating.
The full list of requirements can be accessed on the Fair Work website.
What about pay slips?
The requirements regarding pay slips, what must be included in them and the frequency of providing them to your staff are also highly legislated.
For example, you are required to provide employees with a payslip within one working day of pay day, in electronic form or hard copy.
Each pay slip must contain:
- the employer’s name
- the employer’s ABN (if any)
- the employee’s name
- the date of payment
- the pay period
- the gross and net amount of payment
- any loadings (including casual loading), monetary allowances, bonuses, incentive-based payments, penalty rates, superannuation contributions, or other separately identifiable entitlement paid.
Other slip requirements change depending on whether the employee is salaried or paid at an hourly rate. The full list of pay slip requirements is listed on the Fair Work website.
I don’t think I’ve been keeping on top of my record keeping requirements… what’s next?
The Fair Work Ombudsman can take enforcement action if you’ve breached record-keeping or pay slip obligations under the Fair Work Act.
Fair Work Inspectors may issue infringement notices within 12 months of a contravention. Employers usually have 28 days to pay the penalty. If obligations are not met, inspectors may recommend court action.
It doesn’t stop there. Courts can impose penalties for breaches, including higher penalties for ‘serious contraventions’ where conduct is found to be knowing or reckless.
There is a solution!
Vertruen’s compliance services can audit your record keeping requirements and provide you with guidance and solutions. Getting on top of your record keeping now gives you a proactive advantage, meaning problems can be addressed in real time rather than when Fair Work Inspectors arrive on your doorstep.
