Mid-Year HR Audit: 10 Things to Check Before August

The start of a new financial year is the best time to pause and take stock of your people practices. Pay rates have changed, legislation continues to evolve, and the day-to-day demands of running a business can mean that HR compliance quietly slips down the priority list.

Before August arrives, work through this practical ten-point checklist to make sure your business is on solid ground. Each item takes an hour or less to check, and catching an issue now is always better than dealing with it at the Fair Work Commission.

1.  Pay Rates Are Up to Date

Have you applied the updated minimum wage and modern award rates from 1 July 2026? This is the most urgent item on this list. Check that your payroll system reflects the new rates and that every employee has been paid correctly since the financial year began.

•        National Minimum Wage — updated from 1 July 2026

•        Modern award minimum rates — check all awards applicable to your workforce

•        Penalty rates and overtime — these increase proportionally with the base rate

•        Allowances — both percentage-based and fixed-dollar allowances

2.  Superannuation Is Being Paid Correctly

Confirm that your superannuation guarantee rate has been updated from 1 July 2026 and that you are calculating super on the correct earnings base. Check that super is being paid on time, the due date for the April–June 2026 quarter was 28 July 2026.

•        SG rate updated in payroll system

•        Super calculated on ordinary time earnings (OTE), not just base salary

•        April–June 2026 quarter payment made by 28 July 2026

•        Next quarterly payment due date noted in your calendar

3.  Employment Contracts Are Current

When did you last review your employment contracts? Contracts that predate the Closing Loopholes Act may not reflect current casual employment definitions, right to disconnect provisions, or updated fixed-term contract rules. Contracts for new starters should always reflect the current legislative framework.

•        Are your casual contracts consistent with the current casual definition?

•        Do your fixed-term contracts comply with the two-year maximum and other restrictions?

•        Have any employees moved from casual to permanent without their contract being updated?

•        Do your contracts reference the correct modern award?

4.  Policies Are Current and Acknowledged

Workplace policies need to keep pace with legislation. The right to disconnect, psychosocial hazard management, and positive duty under the Sex Discrimination Act are three areas where many businesses still have gaps.

•        Right to disconnect policy — in place and communicated to all employees

•        Psychosocial hazard policy — reflects Safe Work Australia Code of Practice

•        Respect at Work / sexual harassment policy — updated to reflect positive duty obligations

•        All employees have signed a policy acknowledgement form

5.  Leave Balances Are Managed

High annual leave balances create a financial liability on your balance sheet and can be a sign of culture issues or workload problems. Mid-year is a good time to review leave balances, identify employees with excessive accruals, and consider whether to direct leave under the relevant award provisions.

•        Review leave reports for employees with more than 8 weeks accrued annual leave

•        Check award provisions for directing employees to take excessive leave

•        Confirm long service leave entitlements for employees approaching eligibility

•        Review any outstanding personal leave queries or concerns

6.  Records Are Complete and Accessible

The Fair Work Act requires employers to keep employee records for seven years. These records must include pay rates, hours worked, leave taken, superannuation contributions, and more. If you received an FWO audit request tomorrow, could you produce compliant records for every employee?

•        Pay records for all current and former employees (7-year retention)

•        Signed contracts and policy acknowledgements on file

•        Timesheets or time records — particularly for award-covered employees

•        Records are stored securely and accessible to authorised personnel

7.  Workers Are Correctly Classified

The distinction between employees and independent contractors remains a high-risk area following the Closing Loopholes Act's updated contractor definition. If you engage contractors, review those arrangements now — particularly if the workers are performing work similar to your employees, using your equipment, or working exclusively for your business.

•        Review all contractor arrangements against the updated contractor definition

•        Confirm casual employees genuinely meet the definition of 'casual' under the Fair Work Act

•        Check that labour hire workers are receiving entitlements consistent with same job, same pay obligations

8.  WHS Obligations Are Being Met

Psychosocial hazard management is now a core WHS obligation, not a nice-to-have. If you have not yet conducted a psychosocial risk assessment for your workplace, this is overdue. Physical safety obligations — incident reporting, first aid, emergency procedures — should also be reviewed regularly.

•        Psychosocial hazard risk assessment conducted and documented

•        Risk controls in place and communicated to workers

•        WHS incident register is current

•        First aid kits, emergency procedures, and safety signage are up to date

9.  Performance and Conduct Issues Are Being Managed

Unmanaged performance and conduct issues do not go away — they escalate. Mid-year is a good time to identify any situations that have been put in the 'too hard' basket and make a plan to address them properly. Early, documented intervention is always better than a rushed dismissal process later.

•        Are there any performance concerns that have not been formally addressed?

•        Have all verbal warnings or counselling sessions been documented?

•        Are there any ongoing conduct issues that need a formal process?

•        Have any probationary periods been assessed and documented?

10.  You Know What's Coming Next

Employment law moves quickly in Australia. Staying ahead of what's coming — rather than scrambling to catch up — is the hallmark of a well-run HR function. Right now, the key things to have on your radar include:

•        Further Fair Work Commission decisions expected in the second half of 2026

•        Any industry-specific award variations that may affect your workforce

•        The next superannuation guarantee payment due date

•        Any enterprise agreement that is approaching its nominal expiry date

Want Help Working Through This Checklist?

Element HR offers mid-year compliance reviews that work through each of these areas in depth, giving you a clear picture of where you stand and a prioritised action plan for anything that needs attention.

Get in touch at info@elementhr.com.au or visit www.elementhr.com.au.