Managing your Employment Risks – Wage Records and Payslips

Wage records

As an employer, and like every employer, you are legally required to keep records of all transactions relating to your tax, employment, and superannuation affairs.  Employment record-keeping and pay slip obligations are designed to ensure that employees receive their correct wages and entitlements – and to make it easier for the Fair Work Ombudsman (FWO) to inspect and review when they conduct an audit. 

The requirements are covered under Sections 535 and 536 of the Fair Work Act, and parts 3-6, Division 3 of the Fair Work Regulations.  Specifically, they state

“Employers who engage employees under Commonwealth workplace laws are required to make and keep accurate and complete records for all of their employees (eg. time worked and wages paid) AND issue pay slips to each employee.”

Employee records must be in a legible form that is readily accessible to a Fair Work Inspector (e.g. in plain English), be kept for seven years, must not be altered (unless for the purposes of correcting an error) and must not, to the employer’s knowledge, be false or misleading.

It is useful to remember that a lack of proper records is no defence in a wages claim – ignorance is not bliss in this situation. The Fair Work Ombudsman or Commissioner is likely to give credence to an employee claim and less to an employer who cannot produce their records.  A lack of records is more likely to lead to orders for back payment of wages.

Payslips

Payslips must be issued to employees within one (1) working day of wages being paid – in electronic or paper form and must contain all the elements required by the Act and Regulations (see links below).

These include the employer name and ABN, employee name, date and period of pay, gross and net wage amounts, hourly rates and penalty rates (if appropriate), superannuation deductions and other authorised deductions.

Authorised Deductions

Under the Fair Work Act 2009, an employer is allowed to make a deduction from an employee’s pay if one of the following applies:

• the employee has authorised the deduction in writing (which must specify the amount) and the deduction is principally for the employee’s benefit; or
• the deduction is authorised by:
  • the employee in accordance with a registered agreement (e.g. an award or agreement made under the former Workplace Relations Act 1996)
  • under an award or order of the Fair Work Commission, or
  • under a law or a court order.

What Now?

Take action – Go to the websites below and check your record keeping against those detailed requirements set out by the Fair Work Ombudsman.

FURTHER INFORMATION and RESOURCES

Fair Work Ombudsman – Record Keeping and Payslips

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

ATO – Employment and Payroll Records

https://www.ato.gov.au/Business/Record-keeping-for-business/Detailed-business-record-keeping-requirements/Running-your-business—records/Employment-and-payroll-records/#Recordsforpaymentsmadetoemployees

ATO – Record Keeping Evaluation Tool

https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=&anchor=RKET/&anchor=RKET/#RKET/questions

Donna Mogg

Manager, HTIS QLD & NT