Employee Records – Are you at risk?February 6, 2019
A recent media release from the Fair Work Ombudsman (FWO) serves to remind employers that the stakes are now much higher in terms of ensuring compliance with the record keeping requirements of the Fair Work Act (the Act).
The FWO has commenced legal action against a particular fast food employer for alleged breaches of workplace law including underpayment of wages, penalties and superannuation. What makes this particular case noteworthy is that within its media release the FWO announced that it is using “new reverse onus of proof laws that require employers to disprove underpayment allegations in Court when they have failed to keep adequate time and wages records…”
This refers to section 557C of the Act which places a burden on the Employer to disprove an allegation where the Employer was required to make and keep a record of an employee’s employment. It means that in the absence of complying time and wages records, the Court is entitled to rely on an employee’s evidence (which may also be substantiated by something as simple as the employee’s diary showing the hours worked by that employee) in determining whether the employee was underpaid during the course of their employment.
What is interesting and in addition to the risk of substantial penalties which may ultimately be ordered against the Employer for any contraventions of the Act (including record keeping requirements), is that effectively it is not up to the employee (or the FWO as the regulator) to prove an underpayment of entitlements in these circumstances. It is up to the Employer to disprove the allegation of an underpayment, which in my view is pretty hard to do if proper records are not kept.
As an Industrial Inspector (in a previous life) I was regularly presented with some pretty poor quality time and wages records. Whilst some of those records may have at least been partially compliant with the law as it then was, many failed to record even the basics, let alone the full breadth of the Employer’s legal obligations.
Noting that many things have changed over the years since my days as an Industrial Inspector (and particularly with the rapid advent of workplace technology) employee records are now predominantly electronic or ‘system’ based. The fundamental requirements however remain the same. What is different, is that with the new ‘reverse onus’ law, it is now all the more important for Employer’s to check and audit that their IT and payroll systems comply with employee record keeping obligations.
The Fair Work Regulations require an Employer to make and keep a legible (English language) record relating to matters, including:
- The Employer’s name
- The employee’s name
- Whether the employee’s employment is full-time, part-time, or casual
- The date on which the employee’s employment began
- The ABN (if any of the Employer)
- The rate of pay paid to the employee
- Loadings and penalties
- The gross amount and net amounts paid to the employee
- Any deductions made from the gross amount paid to the employee
- Superannuation contributions; and
- Hours worked during each day (if casual or otherwise entitled to loadings, penalties or overtime)
For further information or a review of your records please contact your Livingstones & SHR Group consultant on +61 7 3833 1200, who will be happy to assist.
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