Introduction
Launching a business in Australia is an exhilarating milestone, but the transition from “solopreneur” to employer changes your legal and operational landscape. These days, the Australian “Fair Work” system is more robust than ever, with a heavy focus on proactive safety and real-time financial compliance.
If you are hiring your first team member this year, here are the essential HR steps to ensure you are protected, compliant, and ready to grow.
1. Identify Your Modern Award
Most employees in Australia are covered by a Modern Award, a legal document that sets out minimum pay rates, overtime, and allowances for specific industries.
- The Trap: Even if you pay above the “minimum wage,” you must still follow the Award’s rules regarding breaks, shift loadings, and penalty rates.
- Action: Use the Fair Work Ombudsman’s Find My Award tool to identify yours before setting a salary.
2. Classify Your Workers Correctly
The line between an independent contractor (ABN) and an employee is strictly enforced.
- Employees work in your business; you control their hours and provide their tools.
- Contractors run their own business; they are hired for a specific result.
- Casual Staff: Be aware of “Casual Conversion” rules. If a casual employee works a regular pattern for 12 months, they may have a legal right to request a permanent role.
3. Master the “Payday Super” Era
As of July 1, 2026, the biggest shift in Australian payroll history has arrived: Payday Super.
- The Rule: You must pay superannuation contributions (currently 12%) at the same time you pay salary and wages, rather than quarterly.
- Stapled Funds: You cannot simply open a new super account for an employee in your default fund. You are legally required to check with the ATO for their “stapled” fund to avoid duplicating accounts.
- Software: You must use Single Touch Payroll (STP) compliant software to report these payments in real-time to the ATO.
4. Meet Your “Positive Duty” & Psychosocial Safety
Workplace health and safety (WHS) has evolved beyond physical hazards.
- Psychosocial Safety: You have a legal duty to manage risks to mental health, such as excessive workload, bullying, or poor role clarity. You must be able to show a “hierarchy of control” for these risks.
- The Respect@Work Act: You have a proactive positive duty to prevent sexual harassment and sex-based discrimination. Having a policy is not enough; you must provide training and take reasonable steps to ensure a safe culture.
- Workers Insurance: Secure Workers’ Compensation insurance immediately upon hiring your first staff member.
5. Mandatory Leave & Privacy Compliance
The National Employment Standards (NES) now include modern entitlements that require careful handling:
- Paid Family and Domestic Violence Leave: All employees (including casuals) are entitled to 10 days of paid leave upfront.
- Privacy Warning: To protect employee safety, this leave must not be labeled as “Domestic Violence Leave” on a payslip. It should be recorded as “Ordinary Hours” or “Other Leave.”
- Paid Parental Leave (PPL): From July 2026, the government-funded PPL scheme has increased to 26 weeks. While the government pays the wage, the ATO now handles a 12% super contribution on these payments directly.
6. Record-Keeping & Right to Work
The Fair Work Ombudsman can audit you at any time. To pass, you must:
- Keep Records for 7 Years: This includes timesheets, leave balances, and superannuation details.
- VEVO Checks: It is a criminal offense to hire someone without the right to work in Australia. You must conduct a Visa Entitlement Verification Online (VEVO) check for any non-citizens.
Frequently Asked Questions
What are the first HR obligations when hiring staff in Australia?
When you hire your first employee in Australia, your initial HR obligations include identifying the correct Modern Award, issuing a Fair Work Information Statement, setting up compliant payroll and superannuation, securing workers’ compensation insurance, and keeping accurate employment records.
Do all employees need to be covered by a Modern Award?
Most employees in Australia are covered by a Modern Award, which sets minimum pay rates, penalties, allowances, and conditions. Even if you pay above minimum wage, you must still comply with the relevant Award rules that apply to your industry or role.
What is Payday Super and how does it affect small businesses?
Payday Super requires employers to pay superannuation contributions at the same time as wages, rather than quarterly. From July 2026, small businesses must use STP-compliant payroll software and ensure super is paid correctly to employees’ stapled funds.
What HR policies are legally required for new employers?
New employers must have key HR policies in place, including workplace health and safety, psychosocial risk management, anti-bullying and harassment, and compliance with the Respect@Work positive duty. Policies should be supported by training and practical implementation, not just documentation.
How long must employers keep HR and payroll records in Australia?
Australian employers are legally required to keep employee records, including timesheets, pay records, leave balances, and superannuation details, for at least seven years. These records must be accurate and accessible in case of a Fair Work audit.
If You Need Guidance on Your First HR Steps
Becoming an employer for the first time can feel overwhelming, especially with Fair Work obligations, payroll compliance, superannuation, and workplace safety requirements to manage.
Liquid HR supports small businesses and first-time employers with practical, compliant HR advice – whether you need help setting things up correctly, reviewing your obligations, or navigating a specific HR challenge as your business grows.
If you’re looking for broader, ongoing support as your team expands, you can also explore our
HR Outsourcing services, designed to provide flexible, end-to-end HR support without the need for an in-house hire.
