A. INTRODUCTION

One are where employers can easily run into problems is failing to keep proper records for their employees in accordance with legislative requirements. The issue most commonly arises when a former employee makes a claim for unpaid entitlements. Government agencies at a federal and state level are able to provide assistance to employees in these claims. Normally the first step taken by these agencies is to require the employer to provide a copy of the employee’s time and wage records. If the records cannot be produced or have not been kept properly, there are two likely consequence:

1. the employee’s allegations about hours and days worked is likely to be accepted over any employer response in the absence of documentary evidence; and

2. the employer may be fined for failing to keep proper records and may be prosecuted for failing to pay award entitlements to the employee.

Given that these fines and penalties can run into tens of thousands of dollars, it is wise for employers to spend some time ensuring they comply with the law.

In summary, under the Workplace Relations Act, there are requirements for details to be kept for all employees relating to:

• The identity of the employee and employer, the nature of the employment, the date of commencement and the name of any applicable employment instrument such as an award, Australian Workplace Agreement or contract;

• Any written agreement for averaging of the employee’s hours of work;

• Pay details;

• Annual leave;

• Superannuation contributions; and

• Termination of employment.

Details of hours worked need to be kept for an employee if:

• they are liable to be paid overtime;

• their annual salary is less than $55000.00 pa (including part time employees who earn less than $55000.00 pa pro rata; or

• they are a casual employee.

Pay slips in written or electronic form must be provided to each employee for each pay period containing specified information. The Workplace Relations Act also has provisions relating to the alteration and correction of records, false or misleading entries in records and inspection and copying of employee records.

Further information and template documents are available from the federal Workplace Ombudsman website – www.wo.gov.au. Requirements at a state level are similar. In Queensland, see www.wageline.qld.gov.au.

B. EMPLOYEE RECORD KEEPING REQUIREMENTS UNDER THE WORKPLACE RELATIONS ACT

1. General requirements

The employer must:

• make a record in accordance with the regulations (s.19.4(1) WR Regulations);

• keep records for a continuous period of seven (7) years after the date on which the entry is changed or the employee’s employment ends, whichever is the soonest (s.19.4(2)(a) & (b) WR Regulations);

• ensure the record is:

  • in legible form in the English language (s.19.6(1)(a) WR Regulations);

  • in a form that is readily accessible to a workplace inspector (s.19.6(1)(b) WR Regulations); and

  • in such a condition that allows a workplace inspector to determine the employee’s entitlements and whether the employee is receiving those entitlements (s.19.5(1) WR Regulations), ie they must be able to be easily and quickly collated (and printed out) and be able to be followed in a simple manner.

The record must contain the following details:

• Name of the employer;

• Name of the employee;

• Whether the employment is:

  • Full time; or

  • Part time;

• Whether the employment is:

  • Permanent;

  • Temporary; or

  • Casual;

• The date on which the employment commenced (s.19.8 WR Regulations).

2. Requirements for details of hours worked (s.19.9 WR Regulations)

If a penalty rate or loading (however described) must be paid for overtime worked by an employee, their record must state their daily starting and finishing times.

If the employee’s base annual salary is less than $55000.00 gross per annum (as increased by indexation in each financial year), then the employer must keep a record of the total number of hours worked each day by the employee. This provision also applies to part time employees who earn less than $55000.00 gross per annum pro rata.

The record must contain a record of the hours worked by the employee if the employee is a casual or irregular part-time employee.

Otherwise, there is no requirement for the employer to keep a record of hours worked by the employee.

3. Record of reasonable additional hours (s.19.10 WR Regulations)

Where the employer and the employee have agreed in writing to an averaging of the employee’s hours of work (over a specified period of no more than 12 months – see s.226 WR Act) the employer must keep a copy of the written agreement.

4. Pay detail requirements (s.19.11 WR Regulations)

The record must contain details of the:

• Rate of remuneration paid to the employee;

• Amount and basis for calculation of:

  • An incentive-based payment;

  • Bonuses;

  • Loadings;

  • Penalty rates; or

  • Any other monetary allowance or entitlement;

• Gross and net amounts paid to the employee; and

• Deductions made from the gross amount paid to the employee.

5. Leave (s.19.12 WR Regulations)

The record must contain details of:

• The employee’s accrual of leave;

• Any leave taken by the employee; and

• A running balance of the employee’s entitlements at any given point in time.

The employer must keep a copy of the written election and a record of the rate of payment for the amount of any leave forgone and when the payment was made.

6. Superannuation contributions (s.19.13 WR Regulations)

The record must contain:

• The amount of the contributions made;

• The period over which the contributions were made;

• The dates on which the contributions were made;

• The name of any fund to which the contributions were made; and

• the date of any relevant election about the fund to which contributions are to be made.

The employer must also keep a copy of the employee’s written election.

7. Termination of employment (s.19.16 WR Regulations)

The record must contain details of whether the employment was terminated by consent, by notice, summarily or in another manner and the name of the person who acted to terminate the employment.

C. EMPLOYEE PAY SLIP REQUIREMENTS FOR EMPLOYERS COVERED BY FEDERAL WORKPLACE RELATIONS LAW

1. General (s.19.20 WR Regulations)

The WR Regulations contain the following general requirements:

• A written pay slip must be issued to each employee for each payment of remuneration made to the employee; and

• The pay slip must be issued within one (1) day of payment being made to the employee.

It is accepted that pay slips may be issued in electronic or hard copy form. However, electronic pay slips must be in a non-editable data file format such as PDF.

2. Contents of pay slips (s.19.23WR Regulations)

Pay slips must contain the following information: 

• The name of the employer;

• The name of the employee;

• The date on which the payment to which the pay slip relates was made;

• The period to which the pay slip relates;

• If the employee is paid at an hourly rate of pay:

  • The ordinary hourly rate;

  • The number of hours in that period for which the employee was employed at that rate; and

  • The amount of the payment made at that rate;

• If the employee is paid at an annual rate of pay, that rate as at the latest date to which the payment relates;

• The gross amount of the payment;

• The net amount of the payment;

• Any amount paid that is an incentive-based payment, bonus, loading, monetary allowance, penalty rate or other identifiable entitlement;

• Any deductions made from the employee’s pay including the name and number of the fund or account into which the deductions were paid;

• If the employer is required to make superannuation contributions for the employee’s benefit, the amount of each contribution made or which the employer is liable to make for the employee during the period to which the pay slip relates and the name of any fund to which that contribution was or will be made. (Employers who contribute a defined benefit interest in a defined benefit fund do not need to fulfil these reporting requirements in respect of superannuation contributions.)

D. OTHER MATTERS IN RELATION TO RECORDS

1. Alteration and correction of a record (s.19.16 WR Regulations)

An employer must not alter a record other than to correct an error. An error must be corrected as soon as the employer becomes aware of the error and the nature of the error must be recorded with the correction.

2. False or misleading entries in records (s.19.17 WR Regulations)

A person must not make, or make use of, an entry in any record if the person knows the entry to be false or misleading.

3. Inspection and copying of records (s.19.18 WR Regulations)

An employer must make a copy of a record available on request by the employee, or former employee, to whom the record relates, or a workplace inspector. The copy must be made available at the employer’s premises within three (3) business days or by posting a copy within 14 days of receiving the request. If the request for a copy is made by a workplace inspector, then the copy can be faxed to the workplace inspector within 14 days of receiving the request.

4. Information concerning a record (s.19.19 WR Regulations)

On request, an employer must state where records relating to an employee are kept. An entitled person (namely a workplace inspector) may interview the employer (or a representative of the employer) at any time during ordinary working hours about a record and the employer must given reasonable assistance in the conduct of the interview.

E. RECORD KEEPING REQUIREMENTS FOR EMPLOYERS COVERED BY STATE LAW

In Queensland, every employer is required to keep a time and wages book which records the following particulars for employees covered by awards:-

1. The employee's full name and address;

2. The employee's date of birth;

3. Unless waived by award, the number of hours worked by the employee during each day and week, including the times which the employee started and stopped worked, and the details of work breaks;

4. The gross and net wages paid to the employee and the details of any deductions, as well as contributions made by the employer to a superannuation fund;

5. Details of sick leave; and

6. The date of commencement and termination of employment.

 
Basic time and wage record books can be purchased from stationers or can form part of a computerised payroll program. The employer must keep these records for six (6) years. For non-award employees, the employer must keep a time and wage record setting out for each pay period:-

1. The employee’s designation;

2. Their wage rate;

3. The gross and net wages paid to the employee; and

4. Details of any deductions made from their wages.

 
When paying an employee wages, the employer must state how the payment is made up by giving a written statement to the employee, including the following particulars:-

1. The date of payment;

2. The period covered by the payment;

3. The number of hours covered by the payment at ordinary and overtime rates;

4. The ordinary and overtime hourly rates and the amount paid at that rate;

5. Gross wages paid;

6. Net wages paid;

7. Details of any deductions; and

8. Amount of contribution paid to a superannuation fund.

 
The legislation makes provision to allow industrial inspectors to inspect these time and wage records retained by employers. These documents can become important in the event of claims of underpayment of wages by former employees. However, the detail requirements can be affected by award requirements which may be more flexible.

As a general rule, employers cannot deduct amounts claimed to be owing by employees from their wages without their permission. There are some exceptions to this general rule. For instance, if an employee terminates the employment relationship and does not provide the required notice, the employer may deduct wages for the notice period from any amount due and owing to the employee.