February 11, 2016
What employers need to know when managing employee records.
Poor record-keeping is proving to be a constant hazard for businesses in the current regulatory environment, across all industries. While you may keep records for your own organisational purposes, did you know that it is actually a legal requirement to keep all employee and former employee records for seven years? Many businesses don’t, and they are facing hefty fines.
Additionally, you should make sure that your records:
- are not altered unless to correct an error
- are not false or misleading
- are in English and can be easily read
- can be provided to a Fair Work Inspector upon request.
If there is a transfer of business, the old employer must ensure that the employment records of all transferring employees are given to the new employer.
The Fair Work Ombudsman’s power to inspect your records.
If the Fair Work Ombudsman (FWO) suspect that there has been a contravention of workplace laws, they have the power to inspect your records. It is often found that poor record-keeping is linked to further employment breaches, such as underpayments and unfair dismissals, as the business seeks to hide its wrongdoing by removing a paper trail, or is simply ignorant of its workplace obligations in general.
What do employers need to know to ensure compliance?
With the FWO’s power to conduct random audits, it is wise to ensure you are aware of, and compliant with, your record-keeping obligations. The information which should be kept for all employees and former employees includes (but is not restricted to):
- general records including the name of the employee, their starting date and status of employment (such as full-time or casual)
- records about hours worked
- records about overtime
- records about leave for permanent employees
- records about superannuation
- records about individual flexibility agreements and guarantees of annual earnings
- records about termination.
If the FWO discovers a deficiency in your record-keeping practices, it may issue you with an infringement notice of up to $2,700 (or $540 for individuals) per contravention, which must be paid within 28 days.
If it decides that the breach was serious, willful or repetitive, you may be taken to court, where you would face fines in the tens of thousands. Protect yourself and your business by making sure that all of your employment records are accurate and complete. It’s a small price for your peace of mind.
For more information on the recommendations and what this means for you, clients should contact the HR Assured team. If you’d like more information about the benefits of becoming an HR Assured client contact us today for an informal chat.