Two massage parlour companies and their sole director have been fined $43,200 for failing to keep employee records. Demonstrating a refreshingly honest approach, the director said that he “did not do the records and other things properly, because I am too busy and lazy” and “I do not want to provide fake infor (sic). If I am not honest, I will have more trouble”. The Tribunal member hearing the matter said that the failure to keep records and issue pay slips was a serious matter and noted that the failure hindered the ability of the Fair Work Ombudsman to identify employee underpayments.

The Fair Work Act was recently amended in an effort to reign in employers who are too ‘busy and lazy’ to comply with their record keeping obligations. Importantly, maximum penalties for record keeping contraventions were significantly increased so that employers who fail to meet these obligations now face maximum penalties of:

  • up to $63,000 per contravention for companies and up to $12,600 for individuals (including managers and directors) who are involved in the contravention; and
  • up to $630,000 per contravention for companies and up to $126,000 for individuals (including managers and directors) who are involved in a ‘serious contravention’ of their record keeping obligations. A contravention will be serious if a person knowingly contravenes their record keeping obligations as part of a systematic pattern of conduct.

In addition, a reverse onus of proof now applies which means that employers who fail to produce records and payslips will bear the burden of proving they paid their employees correctly.

Employers should ensure that they keep employee records for seven years and that they are in English, legible and readily available to an inspector. Key records that employers must keep include:

  • General: details of the employer, the employer’s ABN, the employee’s name and start date and whether they are a full-time, part-time or casual employee.
  • Pay: details of the employee’s pay rate, gross and net payments to the employee, any deductions made from the employee’s pay, details of any separately identifiable amounts (such as incentives, commissions, allowances, loadings and penalty rates) and details of superannuation contributions (including the amount paid, the date of payment and the name of the superannuation fund).
  • Hours: details of hours worked for casual and irregular part time employees, records of overtime worked and a record of any written agreement dealing with averaging hours of work.
  • Leave: details of accrued leave and leave taken, and a record of any written agreement dealing with cashing out annual leave.
  • Termination: details of whether termination was by consent, with notice, summarily or otherwise, and the name of the person who acted to terminate the employment.
  • Pay slips: pay slips should be issued to employees within 1 working day of payment and must include the name of the employee and employer, the employer’s ABN, the date of payment, the pay period, details of gross and net pay, the employee’s ordinary hourly rate and number of hours worked and details of any separately identifiable amounts, any deductions and superannuation contributions.