A VeiraMal HR compliance audit identifies your legal risks before they become expensive problems. Here’s what a thorough audit covers and why Australian businesses can’t afford to skip it.
HR compliance failures are almost always predictable in hindsight. An employment contract that was never updated after an award change. A casual employee who has been working regular hours for three years but is still classified as casual.
A payroll system calculating penalty rates off the wrong base. These aren’t complex problems, they’re common ones. But they tend to stay hidden until a Fair Work investigation, an unfair dismissal claim, or an ATO audit brings them to the surface.
VeiraMal’s HR compliance audit is designed to find these issues before they find you. It’s a systematic, expert review of your employment practices, policies, and records against current Australian employment law, conducted by HR professionals who work in compliance every day and know exactly where the risk concentrates.
This article explains what a VeiraMal HR compliance audit covers, why the investment consistently delivers returns far exceeding its cost, and what happens after the audit is complete. For context on the scope of VeiraMal’s broader HR services, see the Human Resources service page.
What Triggers the Need for an HR Compliance Audit?
Some businesses come to VeiraMal for a compliance audit after a specific event — a Fair Work notice, an employee complaint, a near-miss with an underpayment claim, or a business acquisition that introduced unfamiliar HR practices. Others engage VeiraMal proactively, recognising that their business has grown or changed faster than their HR infrastructure has kept pace.
Common triggers include: significant headcount growth (taking on 10+ employees in a short period), moving into a new industry or acquiring a business in an industry with different award coverage, changes in key management responsible for HR, a legislative change that affects your practices, and simply never having had a formal HR audit done. If any of these apply, VeiraMal’s Tash Talk on Signs That Show You Need an HR Audit is a useful starting point.
What VeiraMal’s HR Compliance Audit Covers
Employment Contracts:
VeiraMal reviews every employment contract on file against current Fair Work Act requirements and the applicable Modern Award or enterprise agreement. Common contract issues include clauses that attempt to reduce minimum National Employment Standards (NES) entitlements (which are legally unenforceable and create legal risk), incorrect award references, outdated engagement terms that don’t reflect the employee’s current role, and the absence of key clauses required for defensibility in a termination or dispute.
For businesses that have been operating for several years, employment contracts are often discovered to be years out of date, some predate awards or legislative changes that have significantly altered minimum entitlements. VeiraMal identifies these and prepares updated contract templates as part of the audit remediation.
Award and Classification Review:
VeiraMal examines whether each employee is correctly classified under the applicable Modern Award and whether their current pay rate meets the minimum for that classification.
Award misclassification is the most common, and most expensive, compliance finding in VeiraMal’s audit work. It happens for a variety of reasons: the business never formally determined which award applied, a role evolved over time without a classification review, or the business has been applying for an award appropriate for a different industry.
Where underpayment is identified, VeiraMal quantifies the back-payment liability and advises on remediation options, including whether voluntary disclosure to the Fair Work Ombudsman would reduce penalty exposure. Proactive disclosure and remediation consistently results in significantly better outcomes than waiting to be investigated.
Payroll Audit – Wages, Super, and Tax:
VeiraMal conducts a payroll review assessing the accuracy of wages, allowances, penalty rates, and overtime calculations; the correctness of superannuation contributions and payment timing; and the accuracy of PAYG withholding and STP Phase 2 reporting. This component of the audit is closely aligned with the EOFY payroll audit checklist that VeiraMal uses for standalone payroll audit engagements.
Leave Management:
VeiraMal verifies that leave accruals are calculated correctly for annual leave, personal leave, and long service leave; that leave records are complete and accurate; and that the full NES leave entitlements are being met. State-specific long service leave obligations receive particular attention, entitlements and pro-rata calculation rules vary between Victoria, New South Wales, Queensland, and Tasmania.
Record Keeping:
The Fair Work Act requires employers to maintain detailed employee records for seven years. VeiraMal assesses whether records include all required fields, time and wages records, payslip records, employment contracts, and termination documentation, and whether records are being kept in a form that would be accessible and useful in a Fair Work investigation or unfair dismissal proceeding.
Businesses that cannot produce complete records during an investigation are in an extremely difficult position. The legal presumption in a Fair Work proceeding is that if an employer cannot demonstrate compliance, non-compliance is assumed. VeiraMal helps businesses establish record-keeping systems that are compliant, accessible, and sustainable.
HR Policies and Procedures:
VeiraMal reviews key HR policies against current legislative requirements, performance management and disciplinary procedures, grievance handling, workplace health and safety obligations, flexible work arrangement policies, and any policy areas where recent legislative changes (such as the Right to Disconnect provisions or psychosocial safety requirements) require updates. See VeiraMal’s Tash Talk on Psychosocial Hazards in the Workplace and Navigating the Right to Disconnect for two areas of current compliance focus.
Wage Theft Compliance:
Since the criminalisation of intentional wage theft under the Fair Work Legislation Amendment (Closing Loopholes) Act, the compliance stakes around underpayment have increased significantly. VeiraMal’s audit specifically assesses whether any patterns of underpayment could be characterised as intentional, and helps businesses implement governance processes that demonstrate genuine compliance intent.
See VeiraMal’s comprehensive Wage Theft Compliance Toolkit for a detailed framework.
What Happens After the Audit: VeiraMal’s Approach
VeiraMal doesn’t deliver a report and walks away. Every HR compliance audit concludes with a structured debrief, a meeting with VeiraMal’s HR advisory team where findings are explained in plain language, the risk rating of each issue is discussed, and the remediation plan is developed collaboratively with the business owner or HR lead.
The written report provides a risk-rated findings register, a quantified liability estimate for any underpayment findings, and a prioritised remediation schedule. VeiraMal distinguishes between issues that need to be addressed immediately (high-risk, significant financial exposure) and those that can be managed as part of an ongoing improvement program (medium and low risk).
Many VeiraMal audit clients transition to an ongoing HR retainer or managed payroll engagement after the audit, using the findings as the foundation for a systematic compliance improvement program. This is the most effective way to move from a reactive compliance position to a proactive one.
See VeiraMal’s Human Resources services and Payroll services for the full range of ongoing support options.
The ROI of a VeiraMal HR Compliance Audit
The Fair Work Ombudsman can issue penalties of up to $82,500 per contravention for a company, and up to $16,500 per contravention for an individual. A single underpayment finding can involve multiple contraventions if different employees were affected, different pay periods were involved, or multiple award obligations were breached simultaneously. The Fair Work Ombudsman recovered over $509 million in wages for underpaid workers in the 2022-23 financial year, and that figure represents only what was detected.
A VeiraMal HR compliance audit typically costs significantly less than the exposure created by any single finding of substance. And for businesses where the audit finds no major issues, the value is equally real, confirmed compliance is a genuine asset in managing employer brand, investor confidence, and business sale readiness.
For more on building ongoing compliance capability, see VeiraMal’s Tash Talk on A Beginner’s Guide to HR Compliance in Australia and the FAQs on HR and Payroll Compliance.
Book your VeiraMal HR Compliance Audit today. Visit our contact page to speak with the team. Know your risk. Fix it fast. Stay compliant.
