Fair Work Audit: What to Do If You're Being Investigated

A letter or call from the Fair Work Ombudsman lands hard, but an audit is not a verdict. Most audits end in corrections and cooperative outcomes, not prosecution. What determines which path yours takes is largely how you behave from the moment the notice arrives.

The first few days

Two responses will hurt you: panic and silence. The Ombudsman audits businesses routinely, both in targeted industry campaigns and in response to employee complaints, and inspectors deal with imperfect payroll every week. What escalates a matter is obstruction, delay or evasiveness — those signal that something is being hidden, and they invite a harder look.

So read the notice slowly and more than once. It will tell you what is actually in scope: which employees, which periods, which award provisions, and which records they want. That scope is your map. It tells you where to concentrate your preparation and, just as importantly, where you are not obliged to volunteer material beyond what's been asked.

Then engage help before you respond to anything. Your accountant or payroll provider can pull the records; an employment lawyer is worth involving early if the matter looks serious or the period is long. Every audit turns on its own facts, and the specifics of your notice, your award and your records are exactly what an adviser is for, so lean on them from day one. A well-meaning but loosely worded response can create problems the notice itself never raised.

Protect every record, exactly as it is

Do not tidy, correct, reorganise or delete anything. Timesheets, rosters, payslips, contracts, emails about pay — leave them all untouched. Altering or destroying records during an investigation is treated with real severity under the Fair Work Act, and it converts a payroll question into an integrity question. If a record is wrong, the right move is to disclose the error alongside the original document, never to fix the document.

Assembling what the Ombudsman asked for

Work methodically through the requested records: time-and-wages records, payslips, employment agreements, award classifications, rosters. As you gather them, run your own parallel check — this is your chance to find any problems before the inspector does. Compare actual payments against the correct award entitlements for the periods in scope, including penalty rates, allowances and superannuation. Present the records in an organised way and meet the stated deadlines; if a deadline is genuinely impossible, ask for an extension early and explain why, rather than letting it lapse.

If your own check turns up errors

Find them first, fix them fast. Calculating the shortfall, back-paying it with super, and telling the Ombudsman what you found and what you've done is the strongest position available to a business that has made a mistake. Inspectors distinguish clearly between an employer who says "we found this, here's the remediation" and one who waits to be caught. Good-faith correction shapes outcomes more than almost anything else you can do.

Working with the inspector

Be courteous, be responsive, and answer what is asked, accurately and without speculation. If you don't know something, say so and follow up rather than guessing. Keep your own record of every interaction: dates, what was requested, what was provided. Let one person in the business (supported by your adviser) own the relationship so the Ombudsman gets consistent, considered responses instead of fragments from five different people.

After the audit: make it the last one

Whatever the outcome, treat the audit as a free diagnosis of your payroll and record-keeping systems. Most findings trace back to the same roots — an award classification chosen once and never revisited, manual timesheets, missed rate updates, or nobody owning compliance. Close those gaps with properly configured payroll software, a scheduled review whenever award rates change, and a named owner for people compliance. Businesses that run their back office as a connected system, rather than a set of ad-hoc tasks, tend to find audits uneventful, because the records are simply there.