All employers must be constantly vigilant with workplace law compliance such as the Fair Work Act 2009. Failure to comply with these obligations leaves employers open to significant penalties if the Fair Work Ombudsman determines that legal action is warranted.
Following is a list of records that we recommend focusing on for workplace law compliance. We have also included some handy hints to assist you with maintaining them in timely, and less burdensome manner.
1. Details of the Employee, and their “type of employment” (full time, part time, or casual).
This is easily achieved by keeping a copy of the contract of employment/letter of offer. There is no specific method specified in the Act for how such records should be maintained, so a note in your payroll system specifying whether the employee is full time, part time or casual, will also suffice.
2. Start and finishing times of all Award covered employees, including meal breaks and overtime.
The easiest way to maintain this record is to use a digital payroll system (such as MYOB, QuickBooks, or Xero). These systems have a “timesheet” function which requires the employer to input the start and finish time for each shift, the system then automatically calculates penalties and overtime payable (if any) for that shift. This digital record complies with your obligations under the Act.
The obvious benefit of using these programs is that you don’t have to keep boxes of paper for seven years. These records are all that are required and you can print off reports if the information is requested by an organisation such as the Fair Work Ombudsman, or the employee themselves.
If you don’t have access to this technology, the next easiest way to maintain this record is to keep copies of the roster or have your staff sign in and out on a time sheet every day. Ensure the roster includes any extra hours worked and it will comply with the requirements of the Act.
3. Leave accrued and Leave taken.
Again, this can be easily managed with a payroll system, however if such a system is not in place then a manual record must be kept. A roster or timesheet can show an employee on “Annual Leave” on a particular day which complies with obligation.
4. Superannuation payments made on behalf of employees as well as the fund name and any request made by an employee to pay the employer contributions into a specific fund.
You can use bank transfer records to comply with this obligation if you have employees with their own private fund. Otherwise, you can rely on superannuation fund records to comply with this obligation provided you download these records and keep them with your other payroll records.
You must also keep any written request by an employee to elect a certain superannuation fund for payments to be made into. You can print and keep text messages, emails, or other written communication for this purpose. If an employee makes a request verbally, you must not make any change until the request has been written down and recorded.
Pay slips are not acceptable as a record as the pay slip only shows what payment is required to be made, not when the payment was actually made.
5. Amounts paid to the employee as wages and any amount deducted from those wages.
All employees must receive a pay slip containing this information. If you use a digital pay roll system you can run a payroll report at any time you need to access this information.
If you are not using a digital payroll system, you must take a copy of any pay slip provided to the employee and keep it on file. Information to be contained on pay slips is detailed below.
6. Any agreement relating to averaging of hours (salary) or Individual Flexibility Arrangements.
Where you have agreed with an employee that you will pay them an annual salary instead of calculating every hour worked every week, you must keep a copy of this agreement on file. These agreements must not be verbal and must be signed by the employee. The contract of employment works for this purpose.
Where an employer has entered into an Individual Flexibility Arrangement in accordance with the Award, the agreement must be kept by the employer as well as any correspondence or calculations which demonstrate that the employer has performed the Better Off Overall Test for that employee. The NBIA does not recommend the implementation of these Agreements. However if you would like to develop and introduce this for your business, we can assist.
7. Agreement to cash out Annual or Long Service Leave
If an employer and their employee agree to the cashing out of a portion of Annual Leave or, where possible, Long Service Leave, you must keep a copy of the written agreement. Where there is more than one form of corrospondence in regard to the agreement (e.g., an email and a letter) all documents must be kept.
8. Pay Slips
Employers must provide each employee with a pay slip for every pay period. If you pay your staff weekly, then they must receive a weekly pay slip. If you pay monthly, then you provide one each month. Each pay slip must be provided as soon as practicable after the payment has been made.
The following details must be provided on each pay slip:
- Employers Name
- Employee’s Name
- The period to which the pay slip relates (i.e. w/e 30 June 2022)
- The date on which the payment referred to on the pay slip is made
- The gross amount of the payment
- The net amount of the payment
- Any amounts paid to the employee that is a bonus, loading, allowance, penalty rate, incentive based payment, or other separately identifiable payment
- The Australian Business Number of the Employer
- Details of the account or fund any deductions were paid into
- The ordinary rate of pay paid to the employee (i.e. ordinary hourly rate)
- The number of ordinary hours worked during the period
- The total amount of the payment which relates to the ordinary rate
- If you are paying a salary, you must include the “year to date” amount as well as the amount that relates to the pay period
- If superannuation contributions must be made for the period, the detail regarding the amount of the contribution as well as the name, or the name and number, of the fund into which the payment will be made.
PLEASE NOTE: There is no obligation to provide a running total of the annual leave accruals for employees on their pay slips. Nor is there an obligation to provide such information regarding sick leave accruals. This information must be kept by the employer but can be provided upon request.
It is very important for employers to remember that if they do not keep accurate records of starting and finishing times as well as wages paid, the employee’s record will be used as evidence, regardless of how inaccurate it may be. The obligation to maintain records remains with the employer and failure to comply with this obligation could result in costs far greater than fines.
If you need assistance with workplace law compliance, please contact us on the Membership Hotline, and we will provide you with all the advice and support possible to ensure you are not at risk of prosecution.