Record-keeping is the least interesting obligation in employment law and quietly one of the most important. Good records turn a dispute into a five-minute check. Poor records turn a five-minute check into a dispute — and in a Fair Work matter, an employer who cannot produce records can find itself having to disprove the employee’s version rather than the other way around.

What has to be kept

Employers must keep certain employee records for seven years. They need to be legible, in English, and not altered unless correcting an error. In broad terms they cover:

  • General employment details — name, start date, employment type, and the employer’s details.
  • Pay records — the rate paid, gross and net amounts, and any deductions, loadings, penalties, allowances or bonuses.
  • Hours — for casual and irregular part-time employees paid a penalty or loading based on hours, a record of hours worked. Where employees are covered by an averaging or overtime arrangement, the relevant hours as well.
  • Leave — leave taken and the balance remaining, plus any cash-out agreements.
  • Superannuation — amounts, dates, the fund, and why that fund.
  • Termination — how employment ended, who terminated it, and the notice given.
  • Individual flexibility arrangements, guarantees of annual earnings and transfer of business records, where they exist.

Pay slips are a separate obligation

Pay slips must be issued within one working day of payment, even when the employee is on leave. They can be paper or electronic. They must show, at a minimum, the employer and employee names, the ABN, the pay period, the date of payment, gross and net pay, and any loadings, allowances, bonuses, penalty rates and deductions. Where the employee is paid an hourly rate, the ordinary hourly rate and hours worked at that rate need to be shown. Superannuation contributions — the amount and the fund — belong there too.

A pay slip that shows a lump sum labelled “wages” and nothing else is not compliant, and it is also the shape that makes underpayment claims impossible to resolve quickly.

The failures worth checking for

  • Records living in a payroll system you no longer use. Seven years outlasts most software subscriptions. When you migrate, export and keep the old data somewhere you can actually read it.
  • Hours not recorded for salaried award-covered staff. If an annualised salary is meant to absorb overtime and penalties, you need hours to demonstrate that it does. Without them the arrangement cannot be reconciled and effectively cannot be defended.
  • Timesheets approved in bulk without being read. An approval is a representation that the record is accurate.
  • Leave balances tracked in a spreadsheet alongside the payroll system. Two sources of truth eventually disagree, usually at termination.

Why this is worth real attention now

Deliberate underpayment of wages became a criminal offence for employers from 1 January 2025. That has sharpened everyone’s focus, and it has made the difference between an honest mistake and an intentional one matter enormously. Records are how you show which one you had. Contemporaneous, complete records that demonstrate you tried to get it right are the most useful thing a small business can have if something turns out to be wrong.

The good news is that record-keeping is one of the few compliance areas you can fix in an afternoon and then keep fixed. Modern payroll software does nearly all of it automatically. The work is checking that yours is switched on, capturing what it should, and exporting somewhere durable.

If you would like a second set of eyes on what your system is actually recording — and what it is quietly not — that is part of what a Payroll Health Check covers.