A recent (September 2025) decision of the Federal Court involving Coles and Woolworths supermarkets has challenged historical assumptions about the use of annualised salary or wage arrangements as a means to effectively perform statutory and award obligations to pay wages and other entitlements in Australia.
To help ensure your record keeping is compliant, we have compiled the key points to be aware of, extracted from the Fair Work Regulations.
Record keeping obligations
| Legislative Provision(s) | Obligation | Explanation |
|---|---|---|
| FW Act s 535 | Retain employee records for 7 years | Records must be retained for audit and inspection purposes, even after employment ends. |
| FW Regs 3.31(1) | Records must be kept in a legible format, in English, and in a form that is readily accessible to a Fair Work Inspector. This ensures that inspectors can promptly assess compliance with the Act. In the Coles/Woollies decision, the supermarkets asked if rosters or clocking in/out data were enough to show overtime hours worked each day, or when overtime started and finished - the answer was no. While it is possible to calculate each of the individual entitlements from the data, records must be ‘readily accessible’ and ‘capable of being copied and made available to an employee or former employee upon request’. Data that needs extra analysis (or cross-comparison), as was the case with Coles and Woolworths, does not meet this requirement. The same applies in relation to penalties, loadings and allowances. Employers are obligated to maintain records which identify why these separate entitlements are payable and sufficient information which enables employees to understand how the amount has been calculated. | |
| FW Regs 3.32 | Record basic employment details | Employers must record the employer’s and employee’s name, employment type (full-time/part-time, permanent/temporary/casual), commencement date, and ABN (if applicable). |
| FW Regs 3.33(1) | Records - pay details | Employers must record the rate of remuneration, gross and net amounts paid, and any deductions from gross pay. |
| FW Regs 3.33(2) | Records - pay - hours for casual/irregular part-time employees | If the employee is casual or irregular part-time and paid by time worked, the record must include hours worked. |
| FW Regs 3.33(3) | Records - pay - separately identifiable entitlements | If the employee is entitled to incentive-based payments, bonuses, loadings, penalty rates, or other monetary allowances, the record must include details of each entitlement. Again, in the Coles/Woollies decision, the employers were found to have breached this regulation because they did not keep records which showed award entitlements to overtime such that an employee or a FWO inspector could easily determine whether an employee had been paid sufficiently. |
| FW Regs 3.34 | Records - overtime hours | If an employee is entitled to a penalty rate or loading for overtime hours actually worked, the record must include the number of overtime hours worked by the employee during each day, or when the employee started and ceased working overtime hours. |
| FW Regs 3.35 | Record averaging arrangements | If an averaging of hours agreement exists, a copy of the written agreement must be kept. |
| FW Regs 3.36 | Record leave taken and balances | Employers must record leave taken and the balance of leave entitlements. If leave is cashed out, the agreement and payment details must also be recorded. |
| FW Regs 3.37 | Record superannuation contributions | Records must include the amount, period, date, fund name, and basis for liability (e.g. employee choice or stapled fund). |
| FW Regs 3.38 | Record individual flexibility arrangements | A copy of the agreement and any termination notice must be kept. |
| FW Regs 3.39 | Record guarantee of annual earnings | If a guarantee is given or revoked under s 330 of the FW Act, the guarantee and revocation date must be recorded. |
| FW Regs 3.40 | Record termination details | Record termination details |
| FW Regs 3.41 | Record transfer of business | In a transfer of business, the old employer must transfer records to the new employer. The new employer must retain these records as if they created them. |
| FW Regs 3.42 | Facilitate inspection and copying of records | Employers must make records available for inspection and copying by employees or former employees within specified timeframes. |
| FW Regs 3.44 | Ensure accuracy of records | Employers must correct errors as soon as they become aware of them, annotate corrections, and prevent unauthorised alterations. Records must not be knowingly false or misleading. |
Pay slip obligations
| Section and Legislation | Obligation | Explanation |
|---|---|---|
| FW Act s 536; FW Regs 3.45 | Issue payslips within one working day of payment | Employers must provide a payslip to each employee within one working day of payment, regardless of whether the employee is on leave. |
| FW Regs 3.45 | Provide payslips in electronic or hard copy format | Payslips must be issued either electronically or as a hard copy. Both formats must contain the same required information and be accessible to the employee. |
| FW Regs 3.46(1) | Include required content on payslips | Payslips must specify: employer and employee name, pay period, payment date, gross and net amounts, ABN (if applicable), and any separately identifiable entitlements (e.g. bonuses, loadings, allowances, penalty rates). |
| FW Regs 3.46(2) | Include deduction details | If deductions are made, payslips must specify the amount and the name (or name and number) of the fund/account into which the deduction was paid. |
| FW Regs 3.46(3) | Include hourly rate details (if applicable) | If the employee is paid at an hourly rate, the payslip must include: the ordinary hourly rate, number of hours worked at that rate, and the total amount paid at that rate. |
| FW Regs 3.46(4) | Include annual rate (if applicable) | If the employee is paid an annual rate of pay, the payslip must include the annual rate as at the latest date to which the payment relates. |
| FW Regs 3.46(5) | Include superannuation contribution details | Payslips must include either the actual or intended superannuation contributions for the pay period, and the name (or name and number) of the fund. |
| FW Regs 3.46(5A) | Exception for new employees | Employers are not required to include fund details on the payslip if it is issued within 14 days of first payment and the employee has not chosen a fund or the ATO has not provided stapled fund details. |
| FW Regs 3.47 | Do not reference FDV leave unless requested | Payslips must not include any reference to paid family and domestic violence leave, including amounts paid, leave taken, or leave balances. |
| FW Regs 3.48 | Report FDV leave as ordinary hours or other payment | Amounts paid for FDV leave must be reported as ordinary hours or another type of payment (e.g. allowance, bonus, overtime), unless the employee requests it be recorded as another type of leave. |