Employers are required to meet a number of record keeping requirements under both federal and state (WA) industrial laws.
The federal industrial laws about record keeping apply to all national system employers. State laws in Western Australia apply to all other employers in Western Australia. For more information, visit State Industrial Laws
All national system employers must make records relating to their employees and keep them for at least seven years. If a business is sold or transferred to another person and the employees continue to work for the new employer, the former employer must transfer all records to the new employer who must keep them for the required time.
Access to records
Monetary penalties can be imposed for failure to keep records as described or to make copies available to employees and workplace inspectors.
Employers must ensure that records are not false or misleading. If errors are discovered in the records or alterations are required, the employer must correct the record soon as the error is noticed and an entry must be made which records the correction.
Employees are entitled to information about their employee records and to be told where their records are being kept. In addition, employers must allow employees and former employees to inspect and copy any of their employee records. Records must be given to the employee at the workplace within 3 working days or within 14 days if the record needs to be posted.
If the employee record is not kept where the employee works or worked, the employer must, as soon as practicable after receiving the request make the copy available at the workplace or post a copy of the employee record to the employee or former employee.
Workplace inspectors are also entitled to inspect and copy employee records and documents which are at the workplace when they are conducting an inspection. They can also require employers to produce employee records and documents within 14 days of a written notice to do so. Workplace inspectors can also keep documents and records if necessary and if they do this they must allow the employer to make a copy.
All employment records must contain the following:
- the name of the employer;
- the name of the employee;
- whether employment is full time or part time;
- whether employment is permanent, casual or temporary; and
- the date the employment began
- the ABN (if any) of the employer
These records can be kept on an employee details form. Here is an example of an Employee Details Form you can use to develop your own.
Records of hours of work are required for employees who are entitled to penalty rates or a loading for overtime worked. Records of hours of work must state:
- the number of overtime hours worked by the employee each day; or
- when the employee started and ceased working overtime;
- if an employer and employee reach an agreement regarding averaging of hours, a copy of the agreement must be kept.
In administering the payroll, you need to consider:
- pay periods;
- pay days;
- form of payment (cash, cheque, electronic funds transfer);
- provision of pay advice;
- directing payment to a person other than the employee who did the work, where necessary; and
- calculation of pay
Pay records must contain:
- details of the rate of remuneration paid to the employee;
- if the employee is causal or irregular part time with a guaranteed basic periodic rate of pay the employer must keep a record of the hours worked by the employee;
- details of bonuses, incentives, loadings, penalty rates and other monetary allowances or entitlements;
- gross and net amounts paid; and
Employees must receive a pay slip which contains the following information within one day of any payment being made:
- the name of the employer;
- the name of the employee;
- the pay period;
- the date payment is made;
- if the employee is paid by the hour:
- the ordinary hourly rate
- the number of ordinary hours being paid
- the amount of payment for the ordinary hours;
- the gross amount of the payment;
- the net amount of the payment;
- if paid by salary, the rate at the date of the payment;
- details of any incentives, loadings, allowances, penalty rates;
- details of any deductions; and
- superannuation contributions made or liable to be made, including the name and number of the fund
- the ABN (if any) of the employer.
Leave records must contain:
- any leave taken by the employee;
- balance of leave from time to time;
- a copy of any election to cash out annual leave; and
- record of the rate of payment for leave forgone and when payment was made.
Keeping leave records will be easier if you require employees to fill out a leave request form. Here is an example of a Leave Request Form you can use to develop your own.
Termination records must contain:
- whether employment was terminated by consent, notice or summarily, or any other manner; and
- name of the person who terminated the employment of the employee.
Individual flexibility agreement
If you have an individual flexibility agreement you must keep a copy of:
- the individual flexibility agreement
- any notice or agreement to terminate the individual flexibility agreement.
Superannuation records must contain:
- name and number of the fund;
- amount of contributions made;
- period over which contributions made;
- date when contributions made;
- the basis upon which the employer became liable to make the contribution;
- a record of any employee election to fund;
- the date of any employee election to fund.
Many people employing for the first time find it daunting to navigate the tax requirements. There are several sources of help. The federal government has a taxation help desk that can be accessed by phone (13 28 66) or internet http://www.ato.gov.au. The government also supplies guidelines for tax payments that are available through post offices and other government agencies.
Your accountant will be able to set you right on the tax rates and compliance requirements. There are also some good software packages, usually associated with accounting programs such as MYOB and Quicken. These offer easy to use tax calculators in addition to providing the other requirements such as leave calculations and pay slips.
Larger organisations can contract payroll management services to do this work. Employers simply need to supply employee details and weekly time sheets and they do the rest.
Method and frequency of payment
Employers must pay wages at least monthly (non award employees) and by one of the following methods:
- cheque, money order, postal order or similar order, payable to the employee;
- electronic funds transfer to credit an account held by the employee;
- a method authorised under a modern award or an enterprise agreement
Wages must be in the form of money. This means that employers and employees cannot agree to wages being paid by other means such as ‘in kind’ for goods and services.
The Pastoral Award 2020 and payment of wages
The Pastoral Award 2020 provides that wages must be paid weekly or fortnightly.
Deductions from wages
Employers are only allowed to deduct amounts from wages if the deduction is authorised in writing by the employee and is principally for the employee’s benefit (e.g. on farm accommodation).
The authorisation must specify the amount of the deduction and can be withdrawn in writing by the employee at any time. If the employee is under 18 years of age, their parent or guardian must authorise the deduction in writing. Here is an example Authority to Deduct you can use to develop your own.
Employers may also deduct amounts from wages if the deduction is authorised by the employee in accordance with an enterprise agreement, a modern award or an order from the Fair Work Commission.
However, deductions which are directly to the benefit of the employer and unreasonable in the circumstances cannot be made even if authorised in accordance with an enterprise agreement or a modern award (see below for what is a reasonable deduction).
In addition, deductions authorised by or under a law of the Commonwealth, a State or a Territory, or an order of a court can be made (e.g. Child Support payments). Any variation in the amount of the deduction must be authorised in writing by the employee.
Employers must also not directly or indirectly unreasonably require employees to spend any part of their wages.
Deductions for the provision of goods or services by an employer to an employee will be reasonable if the goods or services are provided in the ordinary course of the business of the employer and are provided to the employee on the same or better terms as members of the general public. For example, provision of milk and meat.
In addition, a deduction will be reasonable if it is to recover costs directly incurred by the employer as a result of the voluntary private use of the employer’s property by an employee (whether authorised or not). For example, the cost of petrol purchased for the private use of a company vehicle by the employee.
Employers should be aware that deductions such as deductions from a termination payout for annual leave taken in advance is only allowed if the employee authorises it or if it is a term of an award or agreement. The Pastoral Award 2020 provides for such a deduction for award employees. However, award free employees would have to authorise the deduction unless this was a term of an enterprise agreement.
Unauthorised deductions can attract penalties and can be recovered by employees.