October 2006

Paper work, paper work and more damn paper work: record keeping obligations under Work Choices

One can be excused for not being too happy about the new record keeping and pay slip obligations under Work Choices. Indeed, the Federal Government has responded to many concerns expressed by small business and has again delayed their implementation, which will now not apply until 26 March 2007.

It was not surprising then that the employer organisations had recently asked the Federal Workplace Relations Minister to make it a policy not to prosecute companies that are not complying with the record keeping obligations unless the company is clearly underpaying their workers. The Australian Industry Group will use the delayed commencement to press for more changes.

So what is all the fuss about? Haven't we all been keeping these records anyway? Doesn't our payroll system automatically do all this?

Record keeping obligations

The Workplace Relations Regulations 2006 contain prescriptive record keeping obligations on employers. The records must be kept for seven years.

As a basic rule, records relating to the employee, their hours worked (including start and finishing times and hours worked each day), reasonable additional hours worked (overtime), pay, leave, superannuation and reasons for termination need to be kept with respect to each and every employee subject to some exceptions:

  • where an employee earns more than $55,000 per annum (excluding superannuation, bonuses, loadings etc) the employee's hours of work need not be recorded; and

  • where an employee is not paid overtime or other loading, the employee's start and finishing times need not be recorded.

Pay slip obligations

An employer must issue to an employee a written payslip within one day of each payment the employer makes to an employee. The Office of Workplace Services says the payslip can be electronic provided it is actually issued to the worker by email or posted to an electronic personal account.

The Workplace Relations Regulations 2006 then regulates the content of payslips. The regulations say the following details must be on the payslip:

  • the name of the employer;

  • the name of the employee;

  • the classification of the employee under any applicable industrial instrument which the employee derives their entitlements. Where a worker is not covered by an instrument, an employer may simply give their classification under the contract of employment;

  • the date on which the payment was made;

  • the period to which the payment relates;

  • if the employee is paid at an hourly rate of pay, the hourly rate of pay and the number of hours for which the payment was made and the total amount of the payment at that rate;

  • if the employer is not paid by an hourly rate, the rate as at the date to which the payment relates expressed as an hourly rate;

  • the gross amount of the payment;

  • the nett amount of the payment;

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

  • the details in respect of each amount deducted from the gross payment; and

  • the amount of each superannuation contribution made to the benefit of the employee and the name of the fund to which the contribution was made.

Conclusion

The new regulations are designed to ensure that all workers are receiving at least the minimum standards set by Work Choices. For example, under the Australian Fair Pay and Condition Standard employers must now be able to demonstrate that workers are receiving at least the applicable Australian Pay & Classifcation Scale, the casual loading is paid and employees are not being required to work more than 38 ordinary hours a week with reasonable additional hours. The way to prove those matters is to record, record and record!

Failure to comply with the new rules can result in civil penalties up to $2,750 for each breach. Or alternatively, inspectors could issue infringement notices.

While it is true most employers will already record most of the required information, there may still be a need for some tinkering. For example some have asked what it means when annual leave accrues every four weeks but need only be credited once each calendar month.