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 third of ACAPMAs Record Keeping  series, we will explore the requriements around recording when an employee is working.

In addition to the details that need to be communicated, recorded and retained on the commencement of employment there is a requirement for businesses to retain that Actual Hours of Work for each employee.

The requirement is simple;

The Actual Hours Worked 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 Actual Hours must be clearly understood by all businesses.  It is also important that businesses understand the need to record total hours worked for casuals along with the caveats on retention of this information.

Total Hours v Actual Hours

“The requirement is that businesses record the time an employee started work and the time they finished work, and any unpaid breaks start and finish time, each time they are working.  This is the Actual Hours Worked.  This is distinct and different from the Total Hours worked”, explains ACAPMAs Elisha Radwanowski.

“A record that shows an employee worked 40 hours in a week is insufficient.  It may accurately show the total number of hours worked, but this record is not sufficient to identify any shiftloading, weekend, public holiday or overtime penalties, without knowing the days that were worked and the actual start and finish time each day”.

“The requirement is clear, the business must keep a record of the actual hours worked by the employee, showing the date, the start time and the finish time, as well as the start and finish time of any unpaid breaks.  Anything less than this level of detail is going to be a breach of the record keeping requirements”, clarifies Elisha.

There are certain circumstances where the Total Hours Worked need to be retained, particularly when it comes to Long Service Leave calculations.

Guaranteed Hours v Actual Hours

Where the employee is a permanent full or part time employee with Guaranteed Hours the question is often raised ‘do I still need to record and keep actual hours worked?’ and the simple answer is yes.

“While there is a separate requirement to communicate Guaranteed Hours in writing on commencement, and to document any changes in writing, which are themselves records that need to be kept, these are simply commitments to work, they are not a record of the actual times worked”, outlined Elisha.

“In most cases employees will work the hours that are listed on their Guaranteed Hours, but the business must have a process for recording the actual hours worked.”

“In some instances building access records will suffice for this requirement, in others computer logins.  But these unstructured records can be decoupled from the employment records and are often not recognised as employment related records correctly which can lead to storage and retention issues.”

“What is required is a process for recording the actual hours worked for all workers, even those in admin or those on permanent contracted hours”, explains Elisha.

These requirements are very specific for administrative staff on annualised salaries, which will be explored later in this series.

How to Record Actual Hours

The simplest solution to the recording of Actual Hours is the implementation of a Timesheet or Sign-on process.

“The recording of Actual Hours can be done via ultra high tech solutions like biometric sign on, or via the very simple paper based timesheet or sign on sheet at the workplace”, adds Elisha.

Timesheet and Sign On Sheet Must Haves

Any process, high or low tech, to document the Actual Hours Worked needs to clearly and accurately record;

  • The employees name (or employee number)
  • The date the employee is working
  • The time the employee started work
  • The time the employee finished work
  • The time the employee started and finished any unpaid breaks

Where the business practice is to pay for all break times, as is common in fuel transport and is standard in fuel retail (where all breaks are crib breaks) there is no need to record paid breaks, but any unpaid breaks should be recorded.

Simple timesheets can be individual based, where a single employee completes their details for the week/pay period and submits it. Or they can be workplace based, where all employees complete a single timesheet for the week/pay period.

“Which process the business implements for recording the time the employees actually work will depend on the nature of the work, the size and sophistication of the business and the other systems that are in place.  But it is absolutely vital that the records are collected and retained,” notes Elisha.

 

Annual Total Hours Worked and how long records of Hours need to be kept

All employees are entitled to Long Service Leave, including casuals, and in most instances the calculation requires a Total Hours Worked number to be entered.

“The Long Service Leave implications of Actual Hours Worked is one that highlights why there are questions about how long Hours records need to be retained.  The requirement is ‘at least’ 7 years.  But the detail is important here.  It is 7 years AFTER the record has no effect”, explains Elisha.

For example;

Jeremy is employed in 2010 as a casual console operator.

The Actual Hours that Jeremey worked (showing date worked, time started and time finished) in 2010 MUST be kept until at least 2017.  Any claim about the work that Jeremy did in 2010 must be made before 2017.  So many businesses may consider that they can dispose of the records of Jeremys hours from 2010 at the end of 2017, but there are elements of these records that will still have effect after 2017, if Jeremy is still employed.

If Jeremy is still employed in 2017 then at least some of the records from the hours that he worked in 2010 will need to be retained past the 7 year minimum, because they still have effect – in the calculation of Long Service Leave.

The Total Hours that Jeremy worked in 2010 will be required to be recorded into the future for any Long Service Leave calculation.

“In this example before destroying the 2010 timesheet records it is important that the business ensure that it has also recorded the Total Hours Worked for 2010, and ideally a breakdown of Ordinary Hours, Overtime Hours and the other penalties.  So while the records need to be kept for at least 7 years, part or all of the records of Hours Worked may need to be kept for longer”, explains Elisha.

So how long does the business need to keep Hours of Work 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;

  • Actual Hours of Work Records must be kept for at least 7 years from the date of the work in full
  • In summary format, showing total hours per year worked of each type of work (ordinary, overtime, weekend, etc) must be kept for at least 7 years AFTER termination of employment, because these records are required to compliantly process Long Service Leave.

Recap:  Who can access these records?

As outlined in Part 1 of the series the following persons/entities have access to the Hours of Work 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

Recap:  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.

Recap:  What are the penalties for breaches?

There are penalties that apply to breaches of record keeping requriements, including to the requirement to record and retain the Actual Hours of Work.  These penalties range from $66,000 to $7,825,000 to the business under the current and coming penalty schemes respectively.

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.com.au  its free for members. Click here to apply for ACAPMA Membership.

Elisha Radwanowski BCom(HRM&IR)
ACAPMA

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