Employees and record keeping

Good business records help you manage your business and make sound business decisions. They can also improve the value of your business if you decide to sell it.

Employment records

If you employ people under a modern award or agreement, you're legally required to keep accurate and complete time and wages records and issue pay slips to each employee. You need to keep each employees' time and wages records for at least seven years and make sure they are always accessible for inspection. The records should be in plain English, easy to read and not altered in any way, unless correcting an error.

Whilst not all employee records are legally required to be kept, it may be best practice to keep employee records such as;

  • Employee resume and job application details

  • Employee workplace performance records

  • Employee trade certificate or registration certificates

Taxation records

Under tax law, if you operate a business you must keep records that record and explain all transactions.

Employee pay slips

If you employ staff in your business, you'll already know the importance of paying them correctly and on-time.

Being aware of your obligations for providing pay slips is an equally important, though less understood requirement.

Legal requirements

The Fair Work Ombudsman provides simple advice on how to meet your legal obligations. Some of the legal requirements you should be aware of include:

  • giving all employees a pay slip within one working day of their pay day, even when they're on leave.

  • making sure the correct information is provided on the pay slip.

  • issuing the pay slip either electronically or on paper.

It's also recommended that you:

  • use plain English

  • give pay slips to staff securely and confidentially in an easily printable format

  • ensure your staff can access and print their pay slips in private.

Not providing a pay slip, or providing one without the required information, can result in a fine for your business.

Legal obligations for employing people

Management success often relies on treating your staff well. Abiding by your legal obligations as an employer is the first place to start. Legal obligations to employees and other workers come from a variety of sources:

  • federal, state and territory laws

  • industrial awards and agreements

  • tribunal decisions

  • contracts of employment (whether written or verbal).

Some of your legal obligations as an employer include:

  • paying your employees correct wages

  • providing employees with pay slips

  • reimbursing your employees for work-related expenses

  • ensuring a safe working environment

  • not acting in a way that may seriously damage an employee's reputation or cause mental distress or humiliation

  • not acting in a way that damages the trust and confidence necessary for an employment relationship

  • not providing a false or misleading reference

  • forwarding PAYG tax instalments to the Australian Taxation Office (ATO)

  • making appropriate payment under the Superannuation Guarantee legislation.

You may also need to deal with Centrelink if you are an employer of Centrelink customers. In this case, you may be asked to provide wage and employment details for your employees. Centrelink also has resources to aid you in finding payments and services that can help both your business and your staff.

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