The employment landscape is rapidly changing as the government and related organisations are seeking to roll out initiatives to support employers and employees through this unprecedented time.
Below is an overview of all the changes you should be across. For specific advice related to your organisation, please get in touch with us directly. Click on the link to be taken to the relevant section.
1/ Job Keeper Payment
2/ Significant changes to Modern Awards
a) Clerks Private Sector Award 2010
b) Hospitality Industry General Award 2010
3/ Changes to NSW Long Service Leave legislation
4/ Payroll tax exemptions
JOB KEEPER PAYMENT
Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.
Eligible Employers will be eligible for the subsidy if:
- their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
- their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and
- the business is not subject to the Major Bank Levy.
Eligible employers will receive the payment for each eligible employee that was on their books on 1 March 2020 and continues to be engaged by that employer – including full-time, part-time, long-term casuals and stood down employees.
Eligible employers who have stood down their employees before the commencement of this scheme will be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.
Eligible employees are employees who:
- are currently employed by the eligible employer (including those stood down or re-hired);
- were employed by the employer at 1 March 2020;
- are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
- are at least 16 years of age;
- are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
- are not in receipt of a JobKeeper Payment from another employer.
Where employees have multiple employers – only one employer will be eligible to receive the payment. The employee will need to notify their primary employer to claim the JobKeeper Payment on their behalf. The claiming of the tax-free threshold will in most cases be sufficient notification that an employer is the employee’s primary employer.
HOW TO APPLY
To receive the JobKeeper Payment, employers must:
- Register an intention to apply on the ATO website and assess that they have or will experience the required turnover decline at https://www.ato.gov.au/general/gen/JobKeeper-payment/
- Provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired). For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business
- Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). For employees that were already receiving this amount from the employer then their income will not change. For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500, before tax. And for those employees earning more than this amount, the employer is able to provide them with a top-up.
- Notify all eligible employees that they are receiving the JobKeeper Payment
- Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.
CHANGES TO MODERN AWARDS
There have been two successful applications to vary the below two awards to provide flexibility to employers to try and retain employees.
- Hospitality Industry General Award 2010
- Clerks Private Sector Award 2010
As at today (1 April 2020) there is a current application to vary the Restaurant Industry Award 2010.
CHANGES TO CLERKS PRIVATE SECTOR AWARD 2010 – UNTIL 30 JUNE 2020
- Employers are able to close down their operations and direct that employees use their annual leave for such close downs up to the total of their accrued leave, and then to go on to unpaid leave for the remainder of the close down
- Employees can now be directed to perform duties outside the scope of their classification subject to safety, skill and there not being any reduction in an employee’s pay as a result of being so directed
- For part-time or casual employees working from home, reduction of minimum shift to two consecutive hours.
- Flexibility in the spread of ordinary hours of work for day workers who are working from home
- New provision for an agreement in the workplace to temporarily reduce ordinary hours when agreed to by 75% of full-time and part-time employees, provided that ordinary hours may not be reduced to less than 75% of the ordinary hours that the employee worked immediately prior to the reduction
- Employers and individuals can agree that employees can take twice as much annual leave as normal to a proportionately reduced rate of pay and further provision to allow an employer to direct an employee to take annual leave that has accrued with the giving of one week’s notice, subject to consideration of the employee’s circumstances.
CHANGES TO HOSPITALITY INDUSTRY GENERAL AWARD 2010 – UNTIL 30 JUNE 2020
- The ability of employers to direct full-time employees to work reduced hours (as low as 22.8 hours per week)
- Flexibility for employers to direct employees to perform duties within their level of skill that are outside the usual scope of their work
- The ability of employers to direct employees to take annual leave at 24 hours’ notice, as well as the ability to agree to the taking of double the amount of annual leave at half pay.
CHANGES TO NSW LONG SERVICE LEAVE LEGISLATION
On the 25th of March, the NSW Government amended the Long Service Leave Act 1955 allowing employees to take leave in shorter blocks, such as one day a week, and without the traditional one-month notice period, by agreement with their employer.
PAYROLL TAX EXEMPTIONS
Payroll tax deferral arrangements for businesses with total grouped Australian wages over $10 million
Payroll tax customers whose total grouped Australian wages for the 2019/20 financial year are over $10 million, will have the option of deferring the payment of payroll tax for up to six months.
These businesses will not need to make their payment for the March period, normally due on 7 April 2020.
More information will be provided on the deferral arrangement in the upcoming days.
Payroll tax relief for businesses with grouped Australian wages of no more than $10 million
Payroll tax customers whose total grouped Australian wages for the 2019/20 financial year are no more than $10 million will have their annual tax liability reduced by 25% when they lodge their annual reconciliation, which is due on 28 July.
For those customers who lodge and pay monthly and whose total Australian wages will be no more than $10 million for the current financial year, no payment for the months of March, April or May 2020 will be required.
These customers will also have the option of deferring these payments for an additional three months and more information will be provided on the deferral arrangements in the upcoming days.
When lodging your annual reconciliation, you will still need to provide wage details paid in these months and will receive the benefit of a 25% reduction in the amount of tax you would have had to pay for 2019-20.
Threshold increase – 2020/2021 financial year
The tax-free threshold will increase from $900,000 to $1 million for the financial year commencing on 1 July 2020.
Businesses with annual taxable wages up to $3 million will have their payroll tax waived for the 2019-20 financial year.
Eligible businesses must continue to lodge returns but do not need to make further payments for this financial year.
The State Revenue Office will directly contact eligible businesses in relation to reimbursement for payroll tax already paid in the financial year.
Businesses can defer paying payroll tax for the first quarter of the 2020-21 financial year.
Information about the administration of the above relief measures will be sent directly to eligible businesses.
All small and medium business (payroll up to $6.5 million) directly or indirectly affected by COVID-19 will be eligible for:
2-month refund of payroll tax
3-month payroll tax holiday (i.e. no payroll tax to be paid)
Deferment of all payroll tax payments for the rest of 2020
Large businesses (payroll over $6.5 million) affected by COVID-19 are also eligible for a 2-month payroll tax refund and deferment of all payroll tax payments for the rest of 2020.
A business is directly or indirectly affected by coronavirus if their current turnover, profit, customers, bookings, retail sales, supply contracts or other factors are negatively affected compared with normal operating conditions.
From 1 May 2018, a payroll tax exemption was introduced to encourage the employment of additional Territory residents. NT Government announced on 17 March 2020 that the hiring resident employee exemptions have been extended to new hires up to 1 July 2021. All other criteria and conditions remain the same for the extended period.
Employers may be eligible for a payroll tax exemption for up to two years in relation to wages paid to:
A Territory resident who, when hired, increases the total number of Territory residents employed by that business
An existing employee of a business, who relocates from living interstate or overseas to reside in the Territory as their principal place of residence, or
A Territory resident hired to replace a former employee who resides interstate or overseas.
The threshold will be increased to 1 million on 1 July 2020.
Payroll tax will be waived from March to June 2020 for employers or groups of employers, whose Australian taxable wages are less than $7.5 million at 30 June 2020.
Employers must retain evidence of their Australian taxable wages at 29 February 2020 showing their entitlement to claim the waiver.
Six-month payroll tax waiver for business with Australian grouped wages up to $4 million.
Six-month payroll tax deferral for businesses with Australian grouped wages over $4 million.
Payroll Tax waiver Australian Group Wages of up to $5.0 million annually
This measure provides a waiver of Payroll Tax for the entire financial year of 2019-20 for all approved Tasmanian employers with Australian Group Wages of up to $5M for 2019-20; who can demonstrate that their operations have been affected by COVID-19. Monthly returns for March, April and May are not required. The Annual Adjustment Return for 2019-20 must still be lodged by 21 July 2020.
Payroll Tax waiver for the Hospitality, Tourism, and Seafood industries
This measure provides a waiver of Payroll Tax (on relevant industry wages) for the entire financial year of 2019-20 for Tasmanian hospitality, tourism, and seafood industry employers. Monthly returns for March, April and May are not required. The Annual Adjustment Return for 2019-20 must still be lodged by 21 July 2020.
Payroll Tax rebate New youth employees aged 24 years and under
This measure provides a twelvemonth payroll tax rebate to approved employers for new youth employees (aged 24 years and under). The new youth employees must be employed at a point between 1 April and 31 December 2020.
The ACT Government is supporting businesses by waiving payroll tax for six months from April to September 2020 for eligible businesses.
Applications can be made via www.revenue.act.gov.au/payroll-tax/waiver
For more information on the topic, please contact us on 1300 887 458 and speak with one of our HR Consultants. If you are interested in learning more about our HR services, including HR Outsourcing, HR Consulting, HR Advisory Services, contact us at firstname.lastname@example.org.