What are employment records?
Australian employers are subject to legal requirements that involve keeping specified records about employees and the employment relationship, and these records may be made available to current or former employees upon request. 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 are expected to retain.
General records
General employee records 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. Any bonuses, penalties, allowances or incentive payments are also recorded.
Time and wages records
Employers are generally required to maintain records of hours worked by employees and contractors, including details of any additional loadings paid for overtime hours where applicable.
Good record-keeping practices help you identify payroll mistakes and monitor employee details. This may make your business more efficient, and ensure you have complete records if you are audited.
Superannuation records
An employer’s superannuation records 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
If an employee voluntarily provides medical information or documents, then it’s important to store and handle them with the same considerations for privacy and confidentiality as other employment 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
Leave records include information about any leave your employees take and the balance of their leave entitlement. Employment leave recording obligations apply to all employees, 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, it’s important 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.
The Fair Work Act 2009 provides for flexible employment arrangements when certain criteria are met. It’s important to document flexible arrangements in writing and maintain records of any associated correspondence.
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
The Fair Work Ombudsman requires Australian employers to store personnel files for seven years and meet certain criteria, including being:
- 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. 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
It’s important to keep employee records 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 provided access to employee records to determine whether the employer has violated applicable workplace laws.
Employees’ rights to their records
The Australian Fair Work Regulations provide for any employee to view their own employment record on request, along with information about where the records are kept, even after they have stopped working for your organisation.
Related: New Hire Onboarding Checklist
