Compliance audits are systematic reviews of HR practices against legal obligations under employment law, awards, and WHS legislation.
Legislation: Fair Work Ombudsman Compliance Activities | Category: HR Management
What is Compliance Audits?
Compliance audits are systematic reviews of an organisation’s HR practices, policies, and records against legal obligations under employment law, awards, agreements, and workplace health and safety legislation. Audits can be conducted internally, by external consultants, or by regulators such as the Fair Work Ombudsman.
Regular compliance audits are a key risk management tool for Australian employers, helping identify and rectify issues before they result in underpayment claims, penalties, or prosecution. The Fair Work Ombudsman conducts targeted audits in high-risk industries and in response to intelligence or complaints.
Key Compliance Points for Employers
- Key areas to audit include award coverage, classifications, pay rates, hours and breaks, leave accruals, and record-keeping
- Records must be maintained for 7 years — failure to keep records creates presumptions in favour of employees
- Self-audits can identify and allow voluntary rectification before regulatory action
- The FWO’s Employer Self Audit tools provide checklists and calculators
- Proactive compliance programs can be mitigating factors if breaches are later discovered
Frequently Asked Questions
What is Compliance Audits?
Compliance audits are systematic reviews of HR practices against legal obligations under employment law, awards, and WHS legislation.
Why is Compliance Audits important for employers?
Understanding compliance audits helps employers comply with Australian employment law, avoid penalties, and maintain fair workplace practices.
