Employee Records – the hidden foundation of wage compliance (What SMEs need to fix NOW)
Employee Records: What SMEs Must Know to Stay Compliant
Employee records are the foundation of wage compliance. Learn what SMEs must keep, new legal expectations, and the 8-step checklist to reduce underpayment risk.
With wage accuracy under the microscope, the fastest way to reduce risk is to strengthen your employee records. Recent guidance from Fair Work shows exactly what must be kept, how long, and how fast you must produce it—and the penalties if you don’t.
This article breaks it down for time-poor SME owners and managers.
Why Employee Records Matter More Than Ever
If you pay people, you carry legal obligations—not just to calculate wages correctly, but to prove they’re correct.
In practice, that proof lives (or dies) in your records:
time worked, rates paid, allowances, superannuation, leave, and more.
Poor records are often the first red flag for regulators investigating underpayment, and they make it harder to defend honest mistakes.
What the Law Requires – In Plain English
Under section 535 of the Fair Work Act, employers must make and keep employee records for 7 years.
Those records must be:
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Legible
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In English
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Readily accessible
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Not false or misleading
The Fair Work Regulations and Fair Work Ombudsman (FWO) guidance spell out the details: what must be included in pay, time, and leave records; how and when to provide copies; and the one-day rule for payslips.
At minimum, you need to capture:
General particulars
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Employer name / ABN
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Employee name
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Start date
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Employment basis (full-time, part-time, casual)
Pay items
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Pay rate
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Gross and net amounts
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Allowances, loadings, and penalties (separately identifiable)
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Deduction authorities
Hours & overtime
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Start and finish times (especially for casuals and irregular part-timers)
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Overtime hours
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Any averaging agreements
Leave
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Leave balances
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Leave taken
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Cash-out or leave-in-advance agreements (where applicable)
Payslips
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Issued within one working day of pay
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Provided electronically or on paper
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Must include all required details
Access to Records: New Legal Expectations
Recent Federal Court findings confirm that employers must:
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Have systems that allow immediate access to requested records
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Provide copies within strict timeframes (e.g. within three business days if records are kept at the workplace)
Infringement notices and civil penalties can escalate significantly for serious contraventions, as seen in major cases involving large employers.
Superannuation & Wage Changes That Affect Records
From 1 July 2025, the Superannuation Guarantee increased to 12%. At the same time, minimum wage and modern awards increased.
If your records don’t clearly distinguish:
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Base pay vs super (especially in “package” offers), or
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Award classification vs paid rate
you risk accidental underpayment—and you won’t be able to demonstrate compliance.
Penalties and Practical Risks for Employers
The Fair Work Ombudsman can issue infringement notices for record-keeping and payslip breaches.
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Up to $1,980 per breach for individuals
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Up to $9,990 per breach for companies
In more serious cases, courts can impose civil penalties of:
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Up to $495,000 for larger employers
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Up to $4.95 million for serious contraventions
These consequences highlight why maintaining accurate, complete, and readily accessible employee records is essential for compliance and risk protection.
AKYRA’s 8-Step Quick Fix for SMEs
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Map your obligations
Identify applicable awards and any additional record requirements (e.g. annualised salary rules). -
Tighten payslips
Ensure your payslip template includes all mandatory details and is issued within one working day. -
Time capture clarity
Ensure time and attendance systems accurately record overtime and casual hours. Keep supporting rosters and timesheets. -
Leave evidence
Store leave balances and approvals. Keep cash-out and advance agreements with rates and dates. -
Super at 12%
Confirm your system applies the correct super rate from 1 July 2025 and records remittances and fund details. -
Access workflow
Implement a documented process for handling employee record requests within required timeframes. -
Quarterly micro-audit
Sample five employee files and reconcile:
time → payslip → bank file → super file.
Fix and document any discrepancies. -
Prepare for payday superannuation
Ensure systems are ready for payday super, coming into effect on 1 July 2026.
How AKYRA Helps Businesses Stay Compliant
We set up compliant templates, review payroll and payslips against award classifications, and establish a practical “records on request” process—so you can respond quickly and confidently.
We also deliver bespoke retained HR diagnostics to identify risk hotspots, strengthen policies, and build resilience.
AKYRA Strategy & Development
The HR Department When You Don’t Have One
Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not intended to be legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice concerning your specific situation.
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