What are employment records?
Australian employers are legally obliged to retain certain documents with information about their employees and their employment relationship, and to provide these documents to current and former employees when requested. Workplace disputes are unfortunately not uncommon, and employment records can be very useful when disagreements arise.
Note that general HR records such as disciplinary actions or performance management documents are not considered employment records.
The following overview explains the different types of employment records Australian organisations need to retain:
General records
General employee records should include the staff member’s personal details such as name and address, their starting date and whether they are employed full-time, part-time or as a contractor or casual staff member.
Payroll records
Payroll records keep track of the rate paid to each employee, including the gross and net amounts before and after tax, as well as any additional deductions from the gross amount. Furthermore, any bonuses, penalties, allowances or incentive payments must also be recorded here.
Time and wages records
Employers need to keep records of hours worked for all their employees and contractors. Time records must include any extra loadings paid for overtime hours where applicable.
Good record-keeping practices help you identify payroll mistakes and monitor employee details. This will not only make your business more efficient, but also ensures you avoid fines in case you get audited.
Superannuation records
An employer’s superannuation records need to include the employee’s super fund name, the payment amount and date, as well as the pay period covered and the reason the payment was made. This is typically evidence of the employee providing their super fund details and requesting payments to be made into it.
However, employers who pay defined benefit interest into a defined benefit fund for an employee, don’t need to include these contributions in their superannuation records.
Medical records
Australian employers are generally not permitted to request a copy of a medical record from a healthcare professional without the employee’s consent. If such documents are provided by the employee, however, they must be stored appropriately and subject to the same confidentiality conditions as all other employment-related records.
Medical records can be important if they help the employer provide appropriate workplace accommodations and adjustments for the employee in case of a disability, for example.
Annual and sick leave records
You are required to keep a record of any leave your employees take and of the balance of their leave entitlement. This applies to all employees, no matter whether they are covered by the National Employment Standards (NES), a modern award, an employment contract or an enterprise agreement.
If you and your employee have agreed that the company will pay out a certain accrued amount instead of the employee taking leave, you as the employer have to retain a copy of this agreement and, once the payment is made, of the exact amount of leave paid out in cash.
Individual flexibility arrangement records
An individual flexibility arrangement is a written agreement between employer and employee that changes the effect of certain clauses in their employment contract or award.
For employees with an individual flexibility agreement, you must retain a copy of the agreement and, where applicable, a copy of the notice or agreement to terminate the employee’s individual flexibility agreement.
Other employment-related records
Although employers are not legally required to store certain documents, it is best practice to retain them anyway for future reference and to have a log of your staff members’ full employment history. Such documents include your employees’:
- CV and job application
- employment contract
- appraisals and performance reviews
- degree or training certificates.
Related: Employee Evaluation Form
Why do you need to keep employment records?
As in many other countries, businesses in Australia are legally obliged to keep employment records and to meet certain storage criteria.
If records are not kept properly and correctly, Fair Work Inspectors (government officials appointed by the Fair Work Ombudsman under the Fair Work Act 2009) can issue an infringement notice to companies and have them pay a fine. According to the Fair Work Act 2009, it is illegal for employers to create or store employment records that they know are false or misleading.
What’s more, employers can also be taken to court if they fail to make records available for inspection when requested, for example, to prove that they didn’t underpay staff.
Related: How Indeed Can Support a Digital Hiring Process
Storing records
When storing records, bear in mind that these are important legal documents subject to certain requirements. Employers need to be clear on who is entitled to view employee records and any applicable confidentiality requirements.
Retention period and format
According to the Fair Work Ombudsman, Australian employers are required to store personnel files for seven years. Importantly, employment records must meet certain criteria. Specifically, they must be:
- in a form that’s readily accessible by a Fair Work Inspector, if necessary
- legible
- written in plain English
- unaltered; and
- accurate and true to the knowledge of the employer .
Best practices
When keeping employee records, you are well advised to stick to a few common best practices. For one, make sure you create a separate folder for each employee. Under no circumstances should different staff members’ files or documents be stored together in one folder or file. Keeping every record separate will prevent mix-ups and help you meet confidentiality requirements.
It’s also advisable to create a different subfolder or section for each type of record within each employee file, for example, separate sections for medical, superannuation or payroll details. This will make it easier to find specific information when needed.
You may also want to keep paper copies to back up electronic records, and vice versa.
Keeping confidentiality
First of all, any employee record is always private and confidential. Employee records should be kept securely and only be made accessible to authorised persons. These are usually only the employee, the employer, payroll staff and authorised third parties such as tax advisors or accountants. Naturally, auditors and Fair Work Inspectors can also request insight into employment records to review them.
In certain situations, especially workplace disputes, trade union officials may also be given access to employee records in order to determine whether the employer has violated applicable workplace laws.
Employees’ rights to their records
Under the Australian Fair Work Regulations, any employee is entitled to view their own employment record at any time. If a staff member requests this, you as the employer must grant them access, even after they have stopped working for your organisation.
In addition, the employee has the right to know where the records about them are kept.
Related: New Hire Onboarding Checklist
Now that you’re familiar with the legal requirements and best practices surrounding employment records in Australia, you can be confident that your HR department is acting correctly and that you are fulfilling your legal obligations. Any audit will likely be passed with flying colours!
