There are several areas relating to employee records that church employers are affected by laws and regulations in relation to employee records. Some are:
- Fair Work Act/NSW Industrial Relations – see more details below
- Salary Sacrifice/Fringe Benefits – see more details below
Benkorp also recommend some practices around employee records that will reduce the risk of:
- errors
- miscommunication
- employee disputes
- stolen/misappropriated information
To satisfy the above requirements we strongly recommend the following for church & Not-for-profit employers
In Xero ensure that:
- the Organisation Payroll Settings and Employee details are properly set up
- Payruns, including terminations are correctly processed
- Leave Requests/transactions & timesheets are processed using MyPayroll
- Automatic superannuation is used to process superannuation payments
Documentation
Create a secure online folder for each employee including the following completed and signed documents:
- Employee Contract
- Tax File Declaration form
- Superannuation Choice form
- Employee details form for new employees or any changes to employee contracts/details – including pay rates. Click here for Benkorp’s Employee details form FYI
- More detailed Salary Sacrifice calculations documentation for religious practitioners
- Termination details
Fair Work Act/NSW Industrial Relations
NSW Industrial Relations (NSW IR) is part of the NSW Treasury and regulates employment practices. Employers and employees have certain obligations or duties to each other under common law, statutes and their accompanying regulations.
Employer obligations in relation to employee records
The employer must make, and keep the employee records for 7 years. These records must be in English, not be false or misleading and must be made available to current and former employees on request
The main points relating to employees of churches include
Employee records must specify:
- the employer’s name & ABN and the employee’s name
- whether the employee’s employment is full-time or part-time
- whether the employee’s employment is permanent, temporary or casual
- the date on which the employee’s employment began
Pay Slips
To be issued within one working day of pay day and is to include:
- Employer’s name (legal entity), ABN and employee’s name
- Date of payment and Pay period (e.g. 22/3/17 to 28/3/17)
- Superannuation contributions – amount and fund
- Any deductions and any amount paid that is a bonus, loading, allowance, penalty rate, incentive-based payment
- the number of hours, hourly rate and the amount if paid an hourly rate.
- the rate to which the payment relates if paid an annual rate
- Gross and net amount of pay
Leave, Termination & Superannuation
- Leave taken and balance remaining
- Any agreement to cash out leave(see Modern Award)
- Termination by consent, by notice, summarily or in some other manner and the name of the person who acted to terminate the employment
- Superannuation contribution records:
- The amount of contributions made and the dates
- The period over which the contributions were made and,
- the name of the fund
Record Keeping for Salary Sacrifice & Fringe Benefits
For the salary sacrifice to be effective
- the arrangement should be entered into before you perform the work
- there should be an agreement between you and your employer – the contract is usually in writing
- Records of amounts sacrificed and paid created and keep as per payroll records
For more detail please go to the Paying Religious Practitioners section our webpage with relevant links to ATO webpages: https://www.benkorp.com/ato-links-churches-nfps/
Please contact us to discuss this article further or you need any help with your church’s financial management processes at [email protected] or 1300 138 627
© Benkorp Management Services Pty Ltd 2018