Australia: Ten key things to remember about employee record-keeping

Last Updated: 21 June 2016
Article by Michelle Dawson

An employer's record-keeping obligations are important. However, because they are generally seen as fundamental or rudimentary (and because often reliance is placed on payroll software and applications to manage the obligations), some of the finer details are often forgotten or missed.

Here are ten key things to remember about employee record-keeping.

  1. General records

General employment records must contain:

  • the employer's name and ABN (if any)
  • the employee's name
  • the employee's commencement date
  • the basis of the employee's employment (full or part time and permanent, temporary or casual).
  1. Pay records
Pay records must contain:
  • the rate of pay
  • gross and net amounts paid
  • any deductions
  • details of any loadings, penalties, allowances, bonus or incentive payments or other separately identifiable entitlements paid.
  1. Leave records

Where there is an entitlement to leave (so, generally not in relation to casuals) the record needs to include leave taken and the balance of the employee's accrued entitlement.

Also, where an arrangement for cashing out leave exists, the employer must retain a copy of the agreement to cash out, a record of when the payment was made and a record of the rate of payment.

Obligations as to record-keeping for leave exist not only in the Fair Work Act 2009 (Act) but also in the long service leave legislation applicable in the relevant State. In Victoria, records must be kept (in the form approved by the Department of Economic Development, Jobs, Transport and Resources (available at business.vic.gov.au)) of the following:

  • date of commencement
  • date first eligible
  • adjusted date (if applicable)
  • the period of leave taken (start and end dates)
  • the number of weeks taken
  • the rate of ordinary pay at time of taking leave
  • payment details.
  1. Records as to superannuation contributions

Where an employer must make superannuation contributions for an employee, unless the contribution is a defined benefit interest in a defined benefit fund, the record must contain details as to:

  • the name of the fund and details (including the date) of any election made by the employee to have their contributions paid into that fund
  • the amount of the contribution paid and the basis on which the employer became liable to make the contribution, and
  • the date on which the contribution was paid and the period to which the payment relates.
  1. Termination records

Where the employment has been terminated, the employer must keep records which contain information as to the manner in which the employment was terminated (i.e. by consent, summarily, on notice) and the name of the person who terminated the employment.

  1. Records of Individual flexibility arrangements

If an employer and an employee have agreed to an individual flexibility arrangement by reference to an award or enterprise agreement, a record of the arrangement must include a copy of the agreement and any documents relevant to terminating the arrangements.

  1. Records as to Guarantee of annual earnings

Where an employer has given a guarantee of annual earnings, the employer must make and keep records of both the guarantee and the date of any revocation of the guarantee.

  1. Making records available

Employers must make copies of an employee's records available at the request of an employee or former employee.

  1. Retaining records

Employee records must be kept for seven years.

  1. Employer non-compliance with record- keeping obligations

Perhaps the reason to remember the nine other key things, an employer who does not comply with its record keeping obligations risks being issued with an infringement notice under the Act. An infringement notice can be issued within 12 months after the day on which a contravention occurred.

Infringement notices presently carry a maximum fine of $2700 per contravention for a company and $540 per contravention for an individual. That may not seem like a huge amount by reference to some of the other penalty provisions of the Act, but note that it is $2700 (or $540, as the case may be) per contravention. This is significant, because in the arena of record-keeping, chances are that if an employer "gets it wrong" for one employee, they get it wrong for all employees – and the fine can be multiplied by the number of employees in respect of whom the employer got it wrong.

Are you getting it right?

Credit:

https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/ fact-sheets/rights-and-obligations/record-keeping-pay-slips#What-are- the-record-keeping-obligations

Sections 535 & 536 of the Fair Work Act 2009 (Cth)

http://www.business.vic.gov.au/hiring-and-managing-staff/long-service- leave-victoria/calculate-long-service-leave

Section 80 Long Service Leave Act 1992 (Vic)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.

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