Modern award compliance audit checklist
Underpayment claims and Fair Work Ombudsman audits continue to affect Australian businesses of all sizes. A structured award compliance audit can identify exposure before it becomes a headline. This checklist walks through the key areas where underpayment risk sits.
This is a 12-step checklist for auditing an employer's compliance with modern awards under the Fair Work Act 2009 (Cth). It covers award coverage, classification, minimum pay rates, overtime, leave, and record-keeping.
The checklist
Identify applicable awards
Determine which modern award or awards cover the employer's workforce by reviewing the industry and occupational coverage clauses.
Verify employee classifications
Confirm each employee is classified at the correct level under the applicable award by reviewing their duties against the classification definitions.
Audit base pay rates
Compare actual base pay rates against the current minimum rates for each classification level, including any annual wage review increases.
Check overtime calculations
Verify overtime is calculated and paid at the correct penalty rates, including daily and weekly overtime thresholds specified in the award.
Review penalty rate compliance
Confirm weekend, public holiday, evening, and early morning penalty rates are applied correctly for all shifts worked.
Audit allowances
Identify all allowances required under the award (tool, uniform, travel, meal) and confirm they are paid at the current prescribed amounts.
Verify leave entitlements
Confirm annual leave, personal/carer's leave, compassionate leave, and community service leave accrue and are paid at the correct rate, including leave loading where applicable.
Check annualised salary arrangements
If annualised salary arrangements are in place, verify they meet the award's annualised salary clause including the outer-limit hours and annual reconciliation requirements.
Review pay slips
Audit a sample of pay slips against the prescribed content requirements under the Fair Work Regulations 2009.
Check time and attendance records
Verify that time and attendance records are maintained for all employees, including start and finish times, breaks, and overtime hours.
Quantify any underpayment exposure
Calculate the total underpayment exposure across all affected employees, including superannuation on any shortfall amounts.
Prepare remediation plan
Prepare a remediation plan covering back-payments, interest, corrected systems, and any self-reporting to the Fair Work Ombudsman if required.
When this checklist applies
Use when conducting a proactive award compliance audit or responding to an employee underpayment complaint or FWO inquiry.
Common pitfalls
- Misclassifying employees at a lower award level than their actual duties
- Failing to reconcile annualised salary arrangements annually
- Not applying annual wage review increases from 1 July each year
- Overlooking superannuation on underpayment back-payments
- Incomplete time records making it impossible to verify overtime compliance
Run this checklist on a real matter
Quillio can cross-reference employee duties against award classification definitions, calculate pay rate variances, and flag underpayment exposure across your workforce. See /practice-areas/employment or start a free trial.
General award compliance guidance only. Award coverage and entitlements depend on specific facts — obtain tailored employment law advice.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no credit card.
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