Fair Work Act recordkeeping: what every employer must keep and for how long

What records must be kept

Section 535 of the Fair Work Act 2009 outlines the employee records employers are required to maintain. These records must document key aspects of an employee’s employment, including their identification information and the basis of their employment – whether that be full-time, part-time, or casual. Details of pay rate and amounts paid, hours worked, leave taken and balances, superannuation contributions, and termination details also fall under this requirement. Employers should ensure they are prepared for [Payday Super readiness].

The records must be kept in a legible form and written in English. This ensures clarity and ease of understanding should they need to be reviewed. Maintaining records in this manner assists in demonstrating compliance with workplace legislation and obligations.

To facilitate compliance checks, these records must be readily accessible to a Fair Work Inspector.

Pay slips

Section 536 of the Fair Work Act requires employers to provide a pay slip to each employee within one working day of payment. This applies to all amounts paid to the employee.

Pay slips must include specific details as prescribed by the legislation. This information includes the employer’s name and Australian Business Number (ABN), the employee’s name, the pay period, gross and net amounts, details of any deductions, the hourly rate where applicable, the number of hours worked where applicable, and superannuation details.

Employers can provide pay slips electronically or in paper form. There is no prescribed retention period for pay slips under the Fair Work Act.

Retention

Employee records must be retained for a minimum period of 7 years. This timeframe commences from the date the record was created or the date the relevant employment concluded.

Records can be stored electronically, provided they remain legible, complete, and accessible throughout the entire 7-year retention period. This ensures compliance with legislative requirements and facilitates potential audits or inquiries.

Tampering with or destroying records with the intention of avoiding obligations under the Fair Work Act carries the risk of incurring additional penalties.

The reverse onus and penalties

Section 557C of the Fair Work Act introduces a reverse onus of proof in certain underpayment proceedings. This applies when an employer fails to maintain the required records or pay slips as mandated by sections 535 and 536. In such instances, the court may accept an employee’s claims regarding hours worked or amounts paid, unless the employer presents sufficient evidence to disprove them.

Failure to comply with recordkeeping obligations carries civil penalties, which are separate from any penalties related to the underlying underpayment. Maintaining accurate records and providing pay slips is a crucial step in mitigating potential legal risks. Employers can use the penalty estimator to gain an understanding of potential penalties.

From 1 January 2025, intentional underpayment of employee entitlements will be a criminal offence under the Fair Work Act. Consequently, meticulous recordkeeping and the provision of pay slips become a vital defence against such allegations.