Are your record-keeping practices up to scratch? The FWO is on a blitz

The Fair Work Ombudsman (FWO) has recently launched a record-keeping blitz, conducting surprise inspections in businesses across six major Australian cities, including Sydney, Adelaide, Hobart, Melbourne, Perth, and Cairns. This initiative serves as a powerful reminder for employers about the vital importance of maintaining complete and accurate employment records.

During 2023-24, the FWO issued 760 infringement notices nationally, resulting in penalties exceeding $980,000 – a 21.4 per cent increase from the previous financial year. As surprise inspection blitzes become a regular strategy in the FWO’s enforcement efforts to enforce record-keeping compliance, these figures are expected to climb further.

Here, our experts break down why compliance with workplace laws isn’t just a legal obligation but a foundation for trust and fairness in every organisation.

So, what was in the sights of Fair Work Inspectors?

The inspections targeted sectors employing vulnerable workers, such as retail, hair and beauty, and car wash businesses. Their efforts have also extended to a variety of businesses, including mobile phone repair shops, discount stores, independent butchers, bakeries, grocery stores, florists, and dry cleaners.

Businesses were chosen for inspections based on prior contacts with the FWO, including anonymous reports and if they’d been the subject of previous investigations by the regulator. Inspectors reviewed time and wage records, pay slips, and compliance with legal obligations, issuing on-the-spot fines (Infringement Notices) for non-compliance. These visits also involved inspectors ensuring workers had been provided with mandatory documents, including the Fair Work Information Statement and Casual Employee Information Statement by their employers.

Acting Fair Work Ombudsman Michael Campbell emphasised the importance of accurate record-keeping as a foundation for compliance, noting that poor records often indicate workplace breaches like underpayments. It’s important to remember that Infringement Notices carry a maximum of $1,878 per contravention for an individual and more than $9,300 per contravention for a body corporate – a costly mistake for any business.

Complete, accurate, and accessible: the three pillars of record-keeping compliance

It’s not the most glamorous part of running a business, but your organisation’s records must be complete, accurate, and accessible. Failing to maintain accurate employment records can expose businesses and individuals to substantial civil penalties, reaching tens of thousands of dollars per breach.

Specifically, employers must make and keep accurate records for all employees. Employee records are private and confidential, and generally should only be accessed by the employee, the employer or authorised personnel.

Employee records must:

• be kept for seven years;
• be in a legible form and in English; and
• be readily accessible to a Fair Work Inspector.

An employer must also ensure that a record is not altered by another person (unless it is to correct an error) or is knowingly false or misleading.

If Fair Work Inspectors find records to be incorrect, incomplete, or misleading, employers risk receiving infringement notices and may even face court proceedings to address potential underpayments or workplace violations. And you don’t have to look far to see just how serious the consequences can be for a business that doesn’t meet Australia’s strict workplace relations compliance laws.

Notable cases include:

• $10.3 million in penalties against Commonwealth Bank of Australia and CommSec.
• Over $4 million in penalties were imposed against the operators and managers of Din Tai Fung restaurants.
• $1.4 million in penalties against the franchisor of the 85 Degrees brand in Australia.

Employers are required to keep various employee records, including general records, pay records and hours of work records. So, what must be included in such records?

General employment records must include:

• the employer’s name;
• the employer’s ABN;
• the employee’s name;
• the employee’s start date; and
• the status of the employee’s employment (casual, part-time or full-time).

Pay records must include the following:

• the rate of pay paid to the employee;
• the gross and net amounts paid to the employee;
• any deductions from the gross amount; and
• the details of any incentive-based payment, bonus, loading, penalty rate, or other monetary allowance or separately identifiable entitlement paid.

Records about hours worked by employees must include:

• for permanent employees, the record must include the number of overtime hours worked each day, or when the employee started and finished working overtime hours (if overtime penalty rates are applicable
• for casual employees, the guaranteed set rate of pay and a record of the hours worked by the employee;
• a copy of the written variation form if the employee and employer have agreed to vary an employee’s ordinary hours.

Thinking about your workplace compliance? Here’s how Citation HR can help

Whether you’re a small business or part of a franchise network, ensuring compliance is essential. And while most business owners wouldn’t dream of intentionally committing wage theft, mistakes can and do happen – this is where Citation HR can help. Our workplace relations experts can complete a thorough HR compliance audit of your business, and the best part is that this service is included in our monthly, cost-effective subscription, which is designed to protect your business from costly risks.

Let us take care of the complicated stuff so you can get back to doing what you do best – running your business.

Not a Citation HR client? The team at Citation HR can support your business on a range of workplace matters. Contact us today to arrange a confidential, no-obligation chat.