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9 Secrets of Fair Work Timesheet Compliance

Australian businesses have paid out more than $161 million in back wages since the act was passed and that when the most serious violations end up in court, they are typically for payroll or record-keeping offences.

Do you think your business could be at risk?

The sheer complexity of Fair Work means you very well could be — without even knowing it. TSheets has taken a hard look at the regulations and revealed nine things you should do today to help protect your business.

1. Know that Fair Work does apply to you

Almost every one of Australia’s 2.1 million employers is bound by the Fair Work Act, but as Leanne Berry from Love Your Numbers explains, many don’t realise it.

“Unfortunately, some businesses still pay their employees what they believe to be correct based on outdated or wrong information. It’s hard to put a figure on it but I would guess that many small businesses in particular are not aware of the requirements, and if a Fair Work inspector were to look into it, they’re risking big penalties.”

-Leanne Berry, Love Your Numbers

You’re in the national workplace relations system

The national workplace relations system is the cornerstone of Fair Work and if you work for a private or public company somewhere in the Commonwealth, chances are, you’re in it. But in a classic case of “do as I say and not as I do,” the same isn’t true for all government employees. Outside of the Australian Capital Territory and the Northern Territory, many government organisations (and their subsidiaries) are not part of the national system — and that number is growing.

2. Give the national employment standards to every employee

You’ve probably familiar with the 10 national employment standards (NES) that apply to every employee in the national workplace system, and know that they cover fundamental rights like the number of hours in a workweek, time off, flexible work patterns, public holidays, notice periods, and redundancy pay.

You could still be risking a $54,000 fine

But did you know that you have to give every employee a copy of these standards “as soon as possible” after they start their job? If you don’t, your business is risking a fine of up to $54,000 for each violation, and you, as the business owner or manager, could also be held personally liable for additional fines of up to $10,800.

Leanne Berry warns, “Many employers simply aren’t aware of the minimum requirements that Fair Work provides and this means, in many cases, they’re not giving the mandatory handouts to new employees.”


3. Understand what “reasonable” overtime means

Fair Work doesn’t end with the 10 national employment standards. Not by a long shot. It also covers payslip and record-keeping requirements (such as minimum wages and the need to store employee timesheets for seven years), offers protection against workplace bullying and discrimination, and sets out how much each employee should be paid when they work overtime.

Working hours

More on all of that below. But first, given how much unpaid wages are costing Australian businesses, let’s start by looking at overtime. The 38-hour workweek is one of the central tenets of Fair Work and beyond this, any additional hours must be considered “reasonable”. And this all depends on the circumstances.

If you ask an employee to work overtime, Fair Work says you have to weigh their needs (such as any health risks or family responsibilities) against the needs of the business. You also have to consider the nature of their position, whether they will get paid more, how much notice you are giving them, whether they are allowed to average their hours out over the course of several weeks, and what the typical working patterns are in your industry or occupation.

And how do you determine what a typical working pattern is? This is where awards come in…

4. Know your awards (or pay someone else to)

As we’ve seen, almost all employees in Australia are covered by ten basic employment conditions, known as the national employment standards, but here’s where it starts to get complicated. Many employees are protected by detailed workplace standards known as awards, or modern awards, which vary by occupation or industry.

Which awards apply?

Plenty. Even businesses that only operate in one industry usually have to comply with more than one type of award. (Consider the difference between what your back office staff do and what your front line staff do, for example.) To complicate things further, pay rates and other employment conditions can also vary within each award depending on the employee’s experience and qualifications, and whether they are full-time, part-time, casual, fixed term, a shiftworker, hired by the day, hired by the week, on probation or an outworker.

Is there an alternative to awards?

There is. But not so fast. Although it’s possible to set up a special agreement with the Fair Work Commission to replace a multitude of workplace awards — as some companies have done — Cassandra Scott Laurus Bookkeeping explains that this isn’t an overnight process. And you may not find yourself better off for it.

Negotiating individual workplace agreements can be done, and you will usually find that there is union representation involved in the workplace that facilitates this. These are generally known as enterprise bargaining agreements, and one of the key tenets is that there is “no disadvantage” to the employees. This often results in lengthy negotiation over the agreements, which may be considered counterproductive.

-Cassandra Scott, Laurus Bookkeeping

5. Check that your managers really are award-free

Some managers and professionals don’t have awards — even if they work in an industry that does. But critically, and this one of the myths about Fair Work that the ombudsman is eager to dispel, some do not.

Who’s exempt from Fair Work awards?

Exemptions from Fair Work awards are more common in accounting, finance, marketing, legal, human resources, public relations and information technology, but they’re not universal, so it’s wise to check the industry definitions and job classifications, and to do so carefully. “After checking relevant industry awards you should also check the professional award and miscellaneous award,” the ombudsman advises.

What about high earners?

In what appears to be the only hard-and-fast rule of Fair Work, when you earn a salary of more than $138,900 (as of 1 July 2016), awards no longer apply. So there’s one thing you can be sure about.

6. Take another look at your payroll (and hire a good bookkeeper)

Fair Work’s wage regulations have a lot of moving parts.

Minimum wages

The national minimum wage (currently $17.70) is reviewed every year and any adjustments are always made on July 1. But you’ll still need to check each award for variations because they can set different minimums for adults, juniors, employees with a disability, employees in training, casual loadings, piece rates, and levels of experience or qualifications.

Penalty rates

And then there’s penalty rates. These kick in when an employee works outside of their normal hours, in dangerous conditions or if they use their own tools. How much they get paid isn’t only governed by their award. You also have to take into account their salary level, employment contract, and whether they have flexible working arrangements in place.

The solution?

If you’re still doing your own bookkeeping and tracking time manually, it’s time to bring in an expert.

7. Get your record-keeping right

Pay slips must be given to employees electronically or in hard copy within one working day of pay day, even if the employee is on leave, and there’s a long list of all the information they must contain.

What about timesheets?

Company wage records and employee timesheets have to be kept for seven years. The Fair Work regulations also mandate that they have to be readily accessible to a Fair Work inspector, should they be needed. They should be legible, written in English, and above all, they must be accurate. This means any changes must be transparent and only made to correct errors — but if you’re using TSheets, you’ve already got this covered. If not, it’s time to start a free trial.


8. Remember that time off is just as important as time on

Working patterns are another area that the Fair Work Ombudsman loves to delve into and the rules here are more prescriptive than the UK or US.

Breaks and rosters

You’ve got not one but two kinds of breaks under Fair Work: rest breaks and meal breaks. As ever, it’s each award that sets their length and frequency and whether they should be paid or unpaid. Some awards also specify how much time off employees should be given between shifts — and the general rule, when creating shift rosters, is that your employees should always be consulted about any changes. But this is easier than you think. TSheets scheduling handles rosters effortlessly. And if you’re worried about tracking employee breaks, TSheets has also got you covered.

Flexible working arrangements

Do you have employees who have worked for you for more than a year? They may be entitled to flexible working arrangements. That’s if they have school-age children (or younger), are a carer, have a disability, are 55 or older, or if they (or a family member) are a victim of domestic violence. You can only refuse these requests when there are “reasonable business grounds” for doing so (e.g. due to cost, capacity, practicality, etc).

Annual leave

For most employees, the minimum annual leave entitlement is four weeks a year. The main exception is for shift workers, who get five weeks. It accrues over time and can be carried over into subsequent years but the ombudsman considers eight weeks “excessive” (10 weeks if you’re a shift worker) — and a recent rule change means most awards now allow employees to “cash out” their additional annual leave to bring it back down to the four week minimum. But there are a few strings attached. Read more about the rule change here.


9. Find out who’s responsible for complying with Fair Work

The answer might surprise you.