If you’re a small business owner with staff, now is the time to review your payroll record-keeping practices. The Fair Work Ombudsman (FWO) has been actively conducting spot checks across six major Australian cities, targeting businesses to ensure compliance with record-keeping laws.
The recent blitz saw around 50 businesses inspected in cities including Sydney, Melbourne, Perth, Hobart, Adelaide, and Cairns. The focus was on retail and service-based businesses, such as butchers, florists, beauty salons, phone repair shops, and bakeries, many of which employ younger workers or those from migrant backgrounds. These groups are often less familiar with their workplace rights, which is why accurate records are essential.
What Inspectors Are Looking For
FWO inspectors examined:
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Employee pay slips and timesheets
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Fair Work Information Statements
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Casual Employment Information Statements
Businesses found with missing or poorly maintained records were fined on the spot, with penalties ranging from $1,878 for individuals to $9,390 for companies.
It’s essential to recognise that poor record-keeping often indicates more significant problems, such as underpayments. In the last financial year alone, the FWO issued 760 fines, totalling nearly $1 million—a reminder that payroll compliance is not something to take lightly.
What Records Must Employers Keep?
To remain compliant, employers are required to maintain detailed records for each employee. These include:
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Employee details: Full name, employment type (casual, part-time, full-time), start date, and pay rate.
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Payment records: Amounts paid, any deductions, overtime, bonuses, and allowances.
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Work hours: Start and finish times for irregular or overtime work.
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Leave: Records of leave balances and any leave taken.
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Superannuation: Contributions made, dates paid, and fund details.
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Agreements: Copies of any flexible work arrangements or leave-in-advance agreements.
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Termination: Date and reason for ending employment.
Records must be kept for seven years, stored securely, and readily available if requested by a Fair Work Inspector. They must be in English, legible, and only changed to correct genuine errors. Creating false records is illegal and may result in further penalties.
Why Good Record-Keeping Matters
Aside from avoiding fines, accurate records make your life easier. They help you:
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Ensure staff are paid correctly
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Avoid underpayments
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Streamline payroll processes
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Respond quickly to audits or employee queries
The Role of a Professional Bookkeeper
A qualified bookkeeper is one of the best investments a small business can make in terms of payroll compliance. Here’s how they can help:
✅ Review and improve systems: Identify gaps and recommend solutions
✅ Implement reliable processes: For timesheets, pay runs, leave, and super
✅ Stay up to date: Ensure staff receive the correct Fair Work Information
✅ Fix errors efficiently: Bring records up to date without causing more problems
✅ Support compliance: Explain your obligations and prepare for inspections
With a professional bookkeeper by your side, you’ll have the peace of mind that everything is being handled correctly, allowing you to focus on growing your business.
Helpful Resources from Fair Work
To make things easier, the FWO provides a range of free resources:
Need help? Visit www.fairwork.gov.au.
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(Article sourced from the Institute of Certified Bookkeepers)
