As the federal government are undertaking consultations about criminalising underpayments of wages, which includes provisions for not keeping records or keeping false or inaccurate records, employers should be conscious of their record-keeping obligations.

In this article, we explore employer record-keeping obligations and the consequences of not keeping records or keeping inaccurate records.

Record-keeping obligations

The Fair Work Act 2009 (Cth) (FW Act) and the Fair Work Regulations 2009 (Cth) (FW Regulations) provide that employers must make and keep certain records for each employee for 7 years. The records which must be kept are:

  • Basic employment details (such as the name of the employer and employee, whether the employee is full-time, part-time, or casual, and the day the employee began employment);
  • Pay records (such as payslips);
  • Overtime hours worked by employees;
  • If an employee’s hours are averaged under an agreement, a copy of that agreement;
  • Leave entitlements outlining:
    • When an employee takes leave;
    • An employee’s leave balance from time to time; and
    • If leave is cashed out, the rate of pay for the leave cashed out and when that payment was made.
  • Superannuation contributions;
  • Any individual flexibility arrangements or guarantee of annual earnings;
  • If an employee is terminated, how the employment was terminated and at whose initiative.

Not only must an employer make records, but they must also make them available to employees on request for inspection or copying. Any record made under the FW Act or the FW Regulations must be correct and accurate.

Further to the FW Act and the FW Regulations, modern awards also provide for certain records to be made and kept. A common example of modern award record-keeping requirements often arises with respect to the hours of work for part-time employees. For example, clause 10 of the General Retail Industry Award 2020 provides that an employer must agree with a part-time employee to a ‘regular pattern of work’ in writing and keep a copy of the agreement and any variations, specifying:

  • the number of hours to be worked each day;
  • the days of the week on which the employee will work;
  • the times at which the employee will start, and finish work each day; and
  • when meal breaks may be taken and their duration.

Consequences of contravening record keeping obligations

Failure to comply with record-keeping obligations or a modern award will generally result in a contravention of a civil remedy provision under the FW Act. Civil remedy provisions provide for courts to be able to issue fines (known as penalties) against employers. Penalties for non-serious contraventions can be up to $16,000.00 for an individual or $82,500.00 for a company, and serious contraventions can be up to $165,000.00 for an individual and $825,000.00 for a company. The new penalties being considered under wage theft laws may be up to $4.1m for serious contraventions.

Beyond penalties, failing to satisfy record-keeping requirements will result in an employer having the burden of having to disprove any allegations made against them in relation to matters including contraventions of modern awards or the National Employment Standards.

If you have concerns about keeping up with all of your record-keeping obligations and want to know whether your business is compliant, call Workplace Relations team on 1800 (RETAIL) 738 245 and press option 1.