Hand pulling manilla folder from filing cabinet drawer

As your business grows you will find yourself at some point needing to hire staff.  Employees are a great addition to your business, bringing specialised expertise to the table and freeing up your time to do what you do best.

Employing staff does however involve responsibilities regarding keeping accurate holiday and leave records and wage and time records. And new employment standards legislation, which came into force on 1 April 2016 as a way to strengthen enforcement of employment standards, means the negative consequences for incomplete records have increased, resulting in potentially hefty penalties for non-compliance.

We want to assist employers with their record-keeping obligations, and with many employers still uncertain as to what exactly needs to be recorded, we've put together a handy checklist of the minimum requirements for information to be held for each employee under the various Acts:

Holiday and leave records

The Holidays Act 2003 s81 requires employers to keep up-to-date holiday records.  These records may be incorporated with other wage or time records that the employer is required to keep, and must contain the following:

Employee name
Date employee started working for you
Number of hours worked each day in a pay period and the pay for those hours
Employee's current entitlement to annual holidays
The date when the employee last became entitled to annual holidays
Employee's current entitlement to sick leave
Dates of, and payments for, any annual holiday, sick leave, domestic leave or bereavement leave taken by the employee
The dates of, hours worked, and payments for, any public holiday worked by the employee
The date on which the employee became entitled to any alternative holiday
The date of, and payments for, any public holiday or alternative holiday on which the employee did not work, but for which the employee had an entitlement to payment
The cash value of board or lodgings provided
The cash value of any alternative holidays that the employee has surrendered for payment
Date of termination of employee
Amount paid for holidays on termination

Wage and time records

The Employment Relations Act 2000 and the Minimum Wage Act 1983 require employers to keep wage and time records for every employee. Both these Acts state that, where the same information is required under each respective Act, an employer does not need to keep a duplicate record of that information in order to comply with the Acts, thus removing any unnecessary double-ups in record keeping. The wage and time records must contain the following:

Employee name
Employee age (if under 20)
Type of work the employee usually performs
Type of employment agreement (individual or collective)
If a collective agreement is in place: title, expiry date and employee classification under the collective agreement
Hours worked each day, including start and finish times and any non-paid breaks taken, and number of days of employment in each pay period
Dates of, and payments for, any annual holiday, sick leave, domestic leave or bereavement leave taken by the employee
Details of wages paid each pay period and the method of calculation
Details of any employment relations education leave taken

While this may all seem like a lot of information, keeping holiday, leave, wage and time records can be relatively straight forward, with many payroll software programs or computerised timesheet systems doing a lot of the required work for you.

It is acceptable to state the employee's usual hours in their employment agreement, however if the employee works outside of their usual hours additional records will need to be kept (eg a completed timesheet).

Workplace rosters and/or employee timesheets are easy ways to maintain records of hours worked, start and finish times, and days worked by your employees. If timesheets are used, they should be signed by the employee and handed in at the end of the pay cycle.

Annual, sick and bereavement leave forms are also an easy way to record leave requested and leave taken by an employee. Again, these should be signed by the employee.

Records may be kept electronically, but regardless of whether they are stored digitally or in hardcopy form, they must be retained for 6 years.

Don't be like the filing clerk at Dilbert's office! Failure to keep or produce records can result in a penalty of $1,000 per breach, with a cap of $20,000 if there are multiple breaches in a three-month period. The most serious breaches, such as exploitation, can carry maximum penalties of $50,000 for individuals, and the greater of $100,000 or three times the financial gain for a company.

If you wish to discuss any of the above in relation to your own record-keeping practices, or any other payroll and employment queries, contact our payroll and employment specialist Vicki.

       E-mail Vicki


Vicki Cozens  |  Chartered Accountant  

Keep on eye on our blog this month as we present a series of articles on
strategies for business success

You won't want to miss these!

Subscribe to our monthly blog titles e-mail