Here's something most builders don't think about until it's too late: Australia has strict employer timesheet record keeping requirements under the Fair Work Act. Every employer must keep detailed records of the hours their workers put in. Not rough notes. Not memory. Actual records, kept for seven years.
Get it wrong and the penalties aren't small. We're talking fines of up to $99,000 per breach for individuals and $495,000 per breach for companies under the Fair Work Act (as of November 2024, when the penalty unit increased to $330). And the Fair Work Ombudsman doesn't need to prove you underpaid anyone. Simply not keeping proper records is enough to cop a fine.
If you're running a construction business and still relying on paper timesheets or hand-written sign-on sheets, this guide spells out exactly what you need to track, how long to keep it, and what happens when the records aren't there.
What the Fair Work Act says you must record
Under Section 535 of the Fair Work Act 2009 and the Fair Work Regulations 2009, employers must keep time and wages records for every employee that include:
Hours of work
- The number of hours worked each day
- The times the employee started and finished work each day
- Any overtime hours worked
This isn't optional for construction. Under the Building and Construction General On-site Award (MA000020), ordinary hours are 36 hours per week (or 38 depending on the classification). Anything beyond that is overtime at different rates: time-and-a-half for the first two hours, double time after that.
If you can't prove how many hours someone actually worked, you can't prove you paid the right overtime rate. And in a dispute, the burden of proof shifts to you.
Breaks
- When breaks were taken and for how long
Under MA000020, workers are entitled to a 30-minute unpaid meal break. If they work more than 5 hours without a break, they get paid at double time until the break happens. Your records need to show that breaks actually occurred.
Leave
- Annual leave balances and dates taken
- Personal/carer's leave (sick leave) balances and dates taken
- Long service leave, compassionate leave, and any other leave entitlements
Pay details
- The rate of pay (base rate, overtime rates, penalty rates)
- Gross and net pay for each pay period
- Any deductions made
- Superannuation contributions (employer and salary sacrifice)
- Allowances paid (tool allowance, travel allowance, meal allowance, which add up quickly under the construction award)
Employment details
- Start date of employment
- The employee's classification under the applicable award (this determines their pay rate)
- Whether they are full-time, part-time, or casual
- Their ordinary hours of work agreement
The seven-year rule
All of these records must be kept for a minimum of 7 years from the date they're made. That's not 7 years from when the employee leaves. It's 7 years from when each individual record was created.
So if you have an employee who works for you for 5 years and then leaves, you need to keep their records for up to 12 years from when they first started.
Paper records sitting in a box in the shed don't age well. They get water damaged, lost, thrown out during office cleanups, or simply become unreadable. Digital records stored properly don't have these problems.
What happens when records are missing
The Fair Work Ombudsman takes record-keeping failures seriously, especially in the construction industry.
The reverse burden of proof
Under Section 557C of the Fair Work Act, if an employer doesn't have proper records, the employee's version of events is presumed to be correct in any underpayment dispute. If a worker says they worked 50 hours in a week and you can't prove otherwise, the Fair Work Commission will likely side with the worker.
A lot of construction businesses have learned this the hard way.
Real penalties, real cases
The Fair Work Ombudsman regularly goes after construction businesses for record-keeping failures:
- The FWO secured a $53,625 penalty against LROC Builders plus $13,722 against the director personally for failing to comply with Compliance Notices regarding 4 carpenters. The judge called it "a signal to the building and construction industry that non-compliance will not be tolerated."
- In 2024-25, the FWO recovered $358 million for over 249,000 underpaid workers across all industries and set a record of $23.7 million in court penalties. Construction is listed as a priority enforcement sector.
- Under the Protecting Worker Entitlements Act, which increased penalties in recent years, maximum fines for serious contraventions are now five times the standard amount, reaching $4.95 million per breach for companies involved in deliberate exploitation. And from 1 January 2025, criminal wage theft provisions can mean up to 10 years in prison.
The audit scenario
Picture this: Fair Work contacts you about a routine industry audit. They want to see 3 years of timesheet records for your 12 employees. You have:
- A box of paper sign-on sheets, some water-damaged
- A spreadsheet that was last updated 8 months ago
- Text messages from your foreman saying "the boys did 10 hours today"
- Nothing for casual workers who were on site for 3 weeks last summer
That's not a record-keeping system. That's a paper trail with gaps, and every gap is a potential breach.
Why paper timesheets don't cut it anymore
Paper timesheets have been the default in Australian construction for decades. Builders who grew up in the industry learned from bosses who used paper, and the habit stuck. But paper has real problems that go beyond compliance.
Accuracy issues
Paper timesheets have higher error rates than digital ones. Ask anyone who's processed payroll from handwritten sheets and they'll tell you the same stories:
- Rounding: Workers round up start times and round down finish times. Even 10 minutes a day across a crew of 12 adds up to hours of phantom overtime per week.
- Batch entry: Instead of recording times as they happen, workers fill in the whole week's timesheet on Friday afternoon from memory. Memory isn't reliable.
- Illegibility: Handwriting, rain damage, coffee stains. If you can't read it, it's useless as a record.
- Disputes: When there's a disagreement about hours, a paper timesheet signed by the worker is weaker evidence than GPS-verified clock on and clock off times with timestamps.
Admin time
Processing paper timesheets into payroll is slow. For a typical small builder with 10-15 employees, the admin process looks something like this:
- Collect paper timesheets from every worker (chase the ones who forgot)
- Decipher handwriting and check for errors
- Cross-reference with the roster to spot anomalies
- Manually enter hours into a spreadsheet or payroll software
- Calculate overtime, penalty rates, and allowances
- Fix errors found during payroll review
- File the originals somewhere safe
This process eats up 5 to 10 hours per week for most small construction businesses — time that could be spent on the tools or winning the next job.
The hidden cost
When you add up the rounding errors, admin time, payroll disputes, and compliance risk, paper timesheets cost far more than most builders realise. Studies from Australian workforce management providers estimate that businesses switching from paper to digital time tracking typically recover the equivalent of 3-5% of their total payroll costs in the first year through reduced errors and time theft alone.
What a compliant system looks like
You don't need to become a Fair Work expert to get this right. You just need a system that captures the right information automatically and keeps it where you can find it.
The essentials
A compliant time and attendance system for construction should:
-
Record start and finish times automatically — GPS-based clock on and clock off removes the guesswork. With SkillsClock, workers clock on when they arrive at site and clock off when they leave. The times are recorded to the minute, not rounded.
-
Track breaks — The system should log when breaks start and end, so you can prove your workers are getting their entitled meal breaks under MA000020.
-
Capture overtime separately — Hours beyond ordinary time should be flagged automatically, so you know which rate applies before it hits payroll.
-
Store records digitally for 7+ years — Cloud storage means records don't get lost, damaged, or accidentally deleted. They're searchable and exportable for audits.
-
Generate exportable reports — When Fair Work asks for records, you should be able to pull a report for any worker, any date range, within minutes.
-
Show an audit trail — Who edited what, when, and why. If a timesheet entry is changed, the original and the edit should both be visible.
What actually changes when you go digital
Compliance is the main reason to switch. But there are other wins that add up fast:
- Payroll prep drops from hours to minutes: Hours flow straight from the time tracking app to your payroll review screen. No manual re-entry.
- Disputes go away: When clock on and clock off times are GPS-verified and timestamped, there's nothing to argue about.
- You can see who's on site right now: No more calling the foreman to ask "did Dave show up today?"
- Records are always there: Seven years from now, when you need to prove what hours someone worked in March 2026, the records are a search away.
If you're comparing options, see how SkillsDock's time tracking compares to other tools on the market.
Steps to get compliant today
If you're starting from scratch or switching from paper, here's a practical roadmap:
Step 1: Understand your award. If your workers are covered by the Building and Construction General On-site Award (MA000020), read the summary on the Fair Work website. Know the ordinary hours, overtime rates, and break entitlements.
Step 2: Audit your current records. What do you have? What's missing? If you can't produce 7 years of time records for every current and former employee, you have a gap.
Step 3: Choose a time tracking system. Look for something built for construction, not a generic HR tool. It needs to handle multiple sites, outdoor work, and workers who don't sit at desks.
Step 4: Get your team on board. The biggest resistance to digital time tracking comes from workers who are used to paper. Explain that it protects them too — accurate records mean they get paid correctly for every hour.
Step 5: Run both systems in parallel for 2 weeks. Keep the paper timesheets going while your team gets used to the app. Compare the results. Most builders find that the digital records are more accurate from day one.
Step 6: Switch off paper and don't look back. Once your team is comfortable, make digital the only system. File your old paper records for the remainder of the 7-year period and let the new system handle everything going forward.
Where this is heading
The Fair Work Act doesn't care whether you think your record-keeping is "good enough." It requires specific records, kept for a specific period, accessible on request. Construction is one of the Fair Work Ombudsman's priority enforcement areas, and that isn't changing.
Paper timesheets were fine 20 years ago. Today, they're a liability. They eat your admin time, they introduce payroll errors, and they leave you exposed to fines that can bury a small builder.
The fix isn't complicated. It's just a matter of switching from a system that depends on people remembering things to one that records them automatically.
Check our FAQ or explore SkillsClock to see how it works in practice.
Frequently Asked Questions
How long do I have to keep employee timesheet records in Australia?
Under the Fair Work Act 2009, employers must keep time and wages records for a minimum of 7 years from the date the record was made. This applies to all employee records including hours worked, pay rates, leave balances, and superannuation contributions.
What happens if I don't keep proper timesheet records?
The Fair Work Ombudsman can issue fines of up to $99,000 per breach for individuals and $495,000 per breach for companies (since the penalty unit increase in November 2024). In cases of deliberate record-keeping failures, penalties can be up to five times higher, reaching $4.95 million. If records are missing during a dispute, the employee's version of events is presumed correct under the reverse burden of proof.
What timesheet information must construction employers record?
Under the Fair Work Act and the Building and Construction General On-site Award (MA000020), you must record: daily start and finish times, overtime hours, break times and durations, leave taken, pay rates and classifications, gross and net pay, deductions, super contributions, and all allowances paid.
Are digital timesheets legally acceptable in Australia?
Yes. The Fair Work Act doesn't specify the format of records — they just need to be accurate, accessible, and stored securely for 7 years. Digital records stored in cloud-based systems like SkillsClock actually meet this requirement better than paper, because they're searchable, can't be water-damaged, and include automatic timestamps.
Do I need to keep records for subcontractors too?
Fair Work time and wages record-keeping requirements apply to employees, not independent contractors. However, if you engage subcontractors, you still need to keep payment records for ATO reporting (TPAR) and should verify their ABN, insurance, and licences for compliance purposes.
Can workers access their own timesheet records?
Yes. Under the Fair Work Act, current and former employees have the right to request copies of their employment records. You must provide these within a reasonable timeframe — typically 14 days.