Employee Records & Payslips - new obligations

Highlights from a Phillips Fox Update (24/3) regarding implications of the WorkChoice Regulations as regards employee records and payslips follow.

The previous regulations contained three separate divisions dealing with the making and retention of records relating to employees, and these divisions have been consolidated in the new regulations.

The consolidated provisions oblige employers to create and retain records relating to the employment of employees, including ‘transitional employees’, who were bound by an award immediately prior to the commencement of the reforms to the Act. Employers are still, of course, required to issue pay slips to employees. Penalties apply for failure to adhere to these requirements but there is a six month grace period from prosecution in relation to the recording of hours of work (see the first three dot points below).

The new regulations specify that a record must be retained for seven years after the date an entry was changed, seven years after employee’s employment was terminated (whichever occurs first), or seven years after the date the entry was made.

While the content of the employee records is similar to the previous requirements, additional obligations contained in the new regulations include:
· the employee’s daily starting and finishing times;
· recording the employee’s nominal hours (as defined in s92AA of the Act: usually 38 hours per week) and any variations to those hours;
· the total number of hours worked by the employee during each day;
· retaining a copy (if one was made) of the agreement between the employer and employee to average the employee’s hours over a specified period;
· recording the basis upon which the employee’s rate of pay is determined, the gross hourly rate of pay, particulars of any incentive-based payments, recording the pay period and the name of the fund or account into which any deductions from the employee’s remuneration were made;
· the general requirement under the pre-reform regulations to record leave have been expanded into three different clauses related to annual leave, personal leave and other leave. In all three clauses, there is an additional requirement for an employer to record the amount paid to the employee whilst on annual, personal or other leave;
· in relation to annual leave, there is a further requirement to retain the employee’s written decision to have his or her annual leave paid out (if relevant) and to retain a record of the rate at which the annual leave was paid out and the date it was paid. If an employee is a shift worker, the employer must record the dates that the employee was engaged as a shift worker and the date that the shift worker obtained additional annual leave.

These new requirements about recording hours of work and start and finish times will impose challenges for many employers where hours of work are not fixed. If this describes your practice, you will need to review your processes for capturing the information.

Similar to the previous requirements, an employer must make a copy of a record available to an employee or former employee to whom the record relates, or to a workplace inspector if requested. Note if the record is kept on the premises or the workplace inspector made the request, it must be made available within three business days at the employer’s premises or within 14 days if a copy of the record is posted or faxed.

If an employer becomes a successor, transmittee or assignee of the whole or part of a business of the former employer and employs a ‘transferring employee’ (see meaning contained in new regulations), the old employer must transfer the records related to the transferring employee and the new employer is obliged to retain the transferred records as if the new employer had originally made those records.

An employer must issue a payslip to an employee within one day of the pay being made to the employee. The contents of the payslip are similar to those contained in the pre-reform regulations, except there is an additional requirement to record any incentive-based payment, bonus, loading or penalty rate.