There is a requirement for employers to keep and retain accurate and complete records pertaining to the employment of staff.  Failure to keep these records can trigger breach penalties in the millions of dollars under the new criminalised wage theft laws that came into full effect in February 2025.  In this, the first of ACAPMAs Record Keeping series, we will explore the fundamentals of record keeping and explore what elements of the employees role need to be recorded.

What is an employment record?

There are a variety of employment records categories that include those that have a statutory requirement for record keeping such as;

  • Any contract, offer, individual flexibility agreement or Enterprise Bargaining Agreement that applied to the employee
  • Actual hour of work the employee worked
  • Payslips
  • Proof of Payment of Wages
  • Superannuation records of payment
  • Leave applications and payments
  • Deductions from pay applications and implementations
  • Training and compliance/licencing information

To those that have a practical and best practice requirement for record keeping such as;

  • Business instructions
  • Formal Warnings, Awards and Commendations
  • General communications

This series is going to focus on the first group, as the categories of employment records that MUST be kept by employers as the bare minimum.

What is the employment record keeping requirement?

At its most basic the employment record keeping requirement is;

That the records of the employees employment, the relationship and the actual employment in practice, must be recorded for every employee (permanent full time, permanent part time and casual) and must be kept for at least 7 years

What is meant by employment records must be clearly understood by all businesses.

It is also important that businesses understand the complexity around the length of time each category of employment record needs to be retained.

What are the fundamental employment records?

When an employee is engaged there are some communications that must be made to the employee, these form part of the employment records that are fundamental or core to the employee record file this includes;

  • The name and ABN (if applicable) of the employer
  • The name of the employee
  • The employees commencement date
  • The employees status – permanent full time, permanent part time or casual
  • The employment instrument that applies to the employee – this is usually the Award, but could also be an Enterprise Bargaining Agreement or even a Contract for Award Free (rare) or High Income employees
  • The classification of the employees work in the employment instrument – in the Award for example the classification of a console operator is R4

“The fundamentals are really the core of the employment relationship and it is vital to get them right for all workers”, explains ACAPMAs Elisha Radwanowski.

“It is a requirement for these details to be kept by the business, as well as communicated to the employee, so documenting them and providing them to the employee is a way to meet both requirements”,

“It does not need to be onerous, these details can be communicated in a simple format such as a templated Letter Of Offer, and retained digitally.  Ideally the version that is stored by the business should be the one that is acknowledged or signed by the employee, but the version that is sent can also be stored, such as a saved email that includes the attachment showing that this is the version that was sent to the employee”, adds Elisha.

Example Fundamental Employment Record Information Communication

 

There is one more fundamental that applies only to permanent full time and permanent part time workers, that is Guaranteed Hours, which is the topic of Part 2 of this series.

How long does the business need to keep employment records?

The answer is not simple, and each case will need to be reviewed prior to the destruction or disposal of records, but a summary is;

  • Detailed records for most categories of record must be kept for at least 7 years from the date of the work or record creation in full
  • In summary format or in full for some categories must be kept for at least 7 years AFTER termination of employment, because these records are required to compliantly process or calculate entitlements

The Fundamental Employment Records explored above, that record the employer, employee, employment status, employment instrument and employment instrument classification need to be retained for 7 years AFTER they no longer have effect.  As these are core to the daily employment relationship the Fundamental Employment Records will need to be retained for 7 years after termination of employment.

We will explore the retention requirements for all category types throughout this Series.

Who can access employment records?

Employment records are confidential and must be kept confidential.

Despite this confidentiality the following persons/entities generally have access to employment records;

  • The employee that the records reflect – eg. Jeremy can access Jeremy’s records on request and the Business is required to provide the records on request
  • The business payroll and accounting personnel and other authorised entities including internal and external auditors
  • Fair Work Inspectors, who can request these records in person or electronically
  • Union officials that hold appropriate permits may request these records with the permission of the employee involved or with an Order from the Fair Work Commission

What if there are gaps in records?

While every business strives for compliance at all times, the reality is that it is not uncommon, particularly in small businesses, for there to be oversights and gaps in compliance.

Oversights, errors and genuine mistakes are understood and are not the target of regulators when it comes to a penalty based approach.  Regulators are much more interested in ensuring that the business corrects the issues and implements compliant systems to address any of these genuine unintended issues when they come to light.

“This assistance based approach is only available to businesses that are taking an active effort to understand and comply with their responsibilities.  Ignorance of the requirements is no excuse or defence, so all businesses need to work on understanding the requirements and updating their systems where gaps are identified”, explains Elisha.

“What a business must NEVER do is create documents or falsify documents, if there are gaps then there are gaps.  That will have to be accepted and systems updated.  But there is no option to ‘go back’ and ‘create’ the missing records.  If there is a need for modelling to be used to calculate entitlements or address a dispute then there are processes for that, and ACAPMA assists Members with those processes.  But it is never ever ok to create records, accept the gaps, seek assistance and correct the systems”, cautions Elisha.

Generally gaps in the Fundamental Employment Records explored above, that record the employer, employee, employment status, employment instrument and employment instrument classification can be addressed by utilising a Confirmation of Employment process, which provides this information annually to all staff to ensure that there is no confusion and any unintended gaps in records are captured and covered by the annual process.

What are the penalties for breaches?

There are penalties that apply to breaches of record keeping requirements, including to the requirement to record and retain employment records of all categories.

These penalties range from $66,000 to the business for each breach under the current penalty scheme, to, to $7,825,000 for systematic breaches under the new criminalised wage theft penalty scheme that came into place in full in February 2025.

More from this series

 

ACAPMA Employment Compliance Health Check for Fuel Retail and Transport

The Fair Work Ombudsman has made it clear that all employers, of all sizes, should be utilising structured audit programs to address and avoid underpayments.  ACAPMA strongly encourages all members to take this call to heart and ensure that they are having a professional, independent and industry specific audit of compliance done regularly.

“ACAPMA offers members the ability to access fuel transport and fuel retail specific Assisted Compliance Audits, where ACAPMAs in house employment professionals review systems and outputs.  The ACAPMA Assisted Compliance Audits provide members with more than just a list of non-compliances, these audits provide members with ‘assistance’ in the form of templates, resources and guidance, to address the non-compliances and to ‘fix’ the systems to avoid future non-compliances”, explains Elisha.

For more on the ACAPMA Assisted Compliance Audits see;

Here to help

ACAPMA members are reminded that they can access the advice support resources and representation of the ACAPMA Employment Professionals on this issue, or indeed any other employment issue, via employment@acapma.com.au.

HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by contacting the ACAPMA Employment Professionals via employment@acapma.co.au  its free for members. Click here to apply for ACAPMA Membership.

Elisha Radwanowski BCom(HRM&IR)
ACAPMA

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