As an employer in Australia, you have legal obligations relating to pay slips. To protect your business, should your records be audited or in the event of an underpayments claim, please consider the information below.
Most civil contractor employees are covered by the Building and Construction General On-Site Award 2020. The Award requires employees to be paid weekly. Under Clause 20 employees must be paid “no later than the end of ordinary hours on Thursday of each working week”. Penalties may apply for late payment of wages under the Award.
Under Clause 20.5, “If an employee is paid wages by cash or cheque and is kept waiting for their wages more than 15 minutes after the usual time of finishing work on pay day (for reasons not beyond the control of the employer), the employee is to be paid at overtime rates after that 15 minutes for the period they are kept waiting, with a minimum payment of 15 minutes”.
Although most employees are paid by direct debit, it is worth noting the provision.
If your employment contracts, EBA, or award allow for fortnightly or monthly pay, you can pay at those intervals, but you must pay employees at least monthly. A pay slip must be issued to the employee within one working day of payment.
Regulation 3.46 requires employers to provide the following information on each pay slip:
(a) the employer’s name; and
(b) the employee’s name; and
(c) the period to which the pay slip relates; and
(d) the date on which the payment to which the pay slip relates was made; and
(e) the gross amount of the payment; and
(f) the net amount of the payment; and
(g) any amount paid to the employee that is a bonus, loading, allowance, penalty rate, incentive-based payment or other separately identifiable entitlement; and
(h) on and after 1 January 2010—the Australian Business Number (if any) of the employer.
The requirements of (g) are particularly important. If you are paying a loaded rate that includes some allowances, it is crucial that your employment contract clearly spells out what allowances are included in the loaded rate.
Regulation 3.46 (2) provides that “If an amount is deducted from the gross amount of the payment, the pay slip must also include the name, or the name and number, of the fund or account into which the deduction was paid.”
Regulation 3.46 (3) requires the pay slip to provide
(a) the rate of pay for the employee’s ordinary hours (however described); and
(b) the number of hours in that period for which the employee was employed at that rate; and
(c) the amount of the payment made at that rate.
Regulation 3.46 (5) requires pay slips to include:
(a) If the employer is required to make superannuation contributions for the benefit of the employee, the pay slip must also include:
- the amount of each contribution that the employer made during the period to which the pay slip relates, and the name, or the name and number, of any fund to which the contribution was made; or
- the amounts of contributions that the employer is liable to make in relation to the period to which the pay slip relates, and the name, or the name and number, of any fund to which the contributions will be made.
There are civil penalties for failing to comply with the regulations.
It is very important that the information on pay dockets is correct and detailed as per regulations, otherwise you could have problems proving that the employee has been paid correctly if defending under payment claims.
In Heal v Sydney Flames Basketball Pty Ltd (No 2) [2024] FCA 794: the Court highlighted that even an inadvertent failure to provide pay slips constitutes a serious breach of employment rights, though prompt corrective payroll system upgrades can mitigate penalty sizes.
In Fair Work Ombudsman v Myles, the Court held that if an employer fails to keep proper records or issue pay slips, the burden of proof shifts to the employer to disprove an employee’s reasonable wage and hour claims.
If you have questions about pay slips, please contact CCF NSW on (02) 9009 4000 or ccfnsw@ccfnsw.com