Are you legally required to give your employees a pay slip?

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Remember when …

 Remember when bread was threepence a loaf, a man used to deliver bottles of milk in glass containers, and pay packets were little brown envelopes the size of playing cards, with a handwritten payslip inside?

 No, we don’t either – but we have heard stories about it all.

 Times have changed, but one aspect that hasn’t changed, is that employers are still legally required to give every employee a payslip, and within one working day of the pay being received.

 Payslips are no longer legally able to be hand-written. If an employee was seeking a loan, perhaps a personal loan, and the lender required 2 or 3 consecutive payslips, they will not accept a handwritten slip for obvious reasons.

Computers

 Most payslips these days are generated by computer software, either in house from the company computer system, or from an external business, where the payment of employees has been outsourced to a provider. Often, such systems use software such as MYOB or XERO to automate the issuing of payslips using data input by the operators.

 Such payslips may be delivered to the employee in printed form or electronically. Either method complies with the legal requirements, provided the employee has easy access. The payslip must be actually sent to the employee – it is not sufficient to simply allow access through an online portal, or cloud storage system.

 The Fair Work Act 2009 and the Fair Work Regulations 2009 specify the details required on a payslip:

  • Employer name (and ABN if applicable)
  • Employee name
  • Pay period
  • Date of payment
  • Gross pay (before tax) and net pay (after tax)
  •  Loadings, allowances, bonuses, penalty rates and other payments
  • Deductions

Depending upon the circumstances, other inclusions may be:

  • Superannuation – amount of contribution, name of fund
  • If paid hourly – ordinary hourly rate, number of hours, amount paid at that rate
  • If paid at annual rate – the annual rate as of the last day of the pay period

 The above-mentioned software programs, and other purpose-built applications will track employee entitlements for annual leave, long-service leave and the like and will include that information on payslip advice. However, while that is not a legal requirement, it is often considered best practice by employers, and is a recommendation of the Fair Work Ombudsman. Nevertheless, if an employee asks what their current entitlement is, then they are required to be informed.

 The age of computers has meant that employee records such as payslips can easily be stored electronically, with appropriate backup of data, both onsite and offsite. This avoids the need for storerooms full of paperwork. This is a good thing, as these records are required to be kept for 7 years.

Fair Work Inspectors

Running a business can be extremely demanding, often it may feel like spinning plates with no end in sight. Oversights can and do happen. Fair Work Inspectors may check on the veracity of a firm’s pay system, particularly if issues have been raised by employees. Penalties can apply, not only for the business, but for managers and accounting staff involved in the errors. If breaches are seen to be part of a regular pattern, then the court may increase the penalties considerably.

 We have come a long way since the days of the small brown pay envelopes, but added complexities bring their own issues – accuracy and attention to detail is crucial.

 Employment Law – we know it backwards. Owen Hodge Lawyers. We are here to help. If you have a question about this, or any other employment law matter, please don’t hesitate to contact us on 1800 770 780 or send us an email at ohl@owenhodge.com.au

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