New laws tested by the Fair Work Ombudsman mean that good record keeping can help considerably in determining the outcome of underpayment claims.

record keeping for underpayment

The Protecting Vulnerable Workers’ Act, introduced in 2017, amended the Fair Work Act to increase protections for vulnerable workers. One part of the legislation is currently being tested for the first time by the Fair Work Ombudsman in the Federal Circuit Court. The amendment introduced a ‘reverse onus of proof’ in underpayment claims. Prior to the 2017 amendments, the employee who was alleging that they were being underpaid had to prove the underpayment and poor record keeping by their employer. The reverse onus places this evidentiary burden on the employer to prove an underpayment did not take place.

This reverse burden is in keeping with record keeping obligations contained in the Fair Work Act which require employers to keep records of payment and the issuing of pay slips. If an employee or the Ombudsman brings an underpayment claim against an employer, employers with poor record keeping will struggle to prove that an underpayment hasn’t occurred.

This legislation goes further in protecting vulnerable workers such as young people, migrants and the like who may be more vulnerable to underpayment, unfair conditions or other kinds of mistreatment in their employment. The matter currently being pursued by the Fair Work Ombudsman involves a company who own and operate several sushi restaurants. These restaurants employed several South Korean nationals on working holiday visas. These employees were allegedly underpaid by the company on their minimum wage, overtime and weekend penalty rates.

The reverse onus of proof is also applicable to other alleged breaches of the Fair Work Act, if the employer cannot produce records without reasonable excuse to disprove a breach, the breach will be assumed to have taken place.

It is for this reason that employers need to double their efforts to ensure record keeping is being managed correctly and that employees are being paid correctly. The reverse onus means that any failure to keep adequate records may result in a successful claim.

For employees, if you feel you have been underpaid but do not have the documentary evidence to make a claim because your employer has not kept adequate records, this provision may support you in making a successful claim.

For more information on employment law or resolving underpayment claims contact JFMLAW on 02 9331 0266