Fair Work Payroll Compliance for Employers

What This Means for Employers

Fair Work continues to increase its focus on payroll accuracy, and this is something all employers should be mindful of, even if payroll appears to be running smoothly.

Most payroll issues are not intentional. They usually arise when businesses grow, roles evolve, or awards change over time. The challenge is that payroll systems do not automatically adjust unless they are reviewed.

What Fair Work Reviews

When payroll is reviewed, Fair Work is typically checking that:

• Employees are classified correctly under the relevant award

• Wages, penalties, and leave are being calculated accurately

• Superannuation is calculated on the correct earnings

• Payroll and time records are complete and up to date

  
  

Even small errors can add up when they occur across multiple pay periods or employees.

A common scenario we see is where a long-term casual employee gradually takes on more responsibility and begins working regular, consistent hours. Over time, the role starts to look more like a permanent position, but the payroll setup is never updated to reflect this change.

When the payroll is later reviewed, it becomes clear that the employee should have been reclassified earlier. This can result in back pay for leave entitlements and adjustments to superannuation.

Nothing was done intentionally wrong, but the time, cost, and stress involved in fixing the issue is far greater than if the change had been identified and addressed earlier.

Why These Issues Are Often Missed

Payroll is often set up once and then trusted to run. Award updates, role changes, and business growth can quietly create gaps between what is happening in the business and what the payroll system reflects.

Many employers assume that if pay slips are issued and staff are paid on time, everything must be correct. Unfortunately, that is not always the case.

What Employers Can Do

Reducing payroll risk does not have to be complicated. A few proactive steps can make a big difference:

• Reviewing classifications when roles or hours change

• Checking payroll settings after award or rate updates

• Keeping payroll records clear and consistent

• Addressing questions early rather than later

Tip: If you are still managing payroll in house and finding it time consuming, stressful, or hard to keep up with, this is often a sign it may be time to hand it over.

Outsourcing payroll can reduce compliance risk, free up your time, and give you confidence that wages, super, and records are being handled correctly and in line with Fair Work requirements.

If you are unsure whether your current setup is still right for your business, we are happy to have a conversation.

Disclaimer: This article is intended to provide general guidance and is not specific advice. We encourage you to seek tailored advice for your circumstances.