Unpaid Trust Distributions: ATO's Rulings vs. Recent AAT Decision and What It Means for 2023
It has long been the ATO’s practice to treat a trust’s unpaid present entitlements (“UPE”) to a company as a loan for th...
The Fair Work Act (FW Act) was amended just before Easter (9 April 2020) to support the Jobkeeper scheme.
This COVID-19 update is designed to provide employers with an overview of the key points of the Jobkeeper scheme and the changes to the FW Act. What you can and can’t do!
An eligible employee:
(Amendments of the Fair Work Act 2009 – Item 5, Part 6-4C- Coronavirus economic response)
The changes are designed to keep people in work and employed, throughout the COVID-19 pandemic.
1. Increased flexibility for employers with authority to direct
Under the FW Act you now have more flexibility and the authority to direct your employees to:
2. Pass on the Jobkeeper payment to your employees
If you qualify for the Jobkeeper scheme you must pass on the maximum Jobkeeper payment ($1,500 gross) to each of your eligible employees.
What if one of my eligible employees earns less than $1,500 per fortnight?
You cannot pay your employees less than $1,500 gross per fortnight and be entitled to receive payment for that employee under the Jobkeeper scheme.
If you want to claim a Jobkeeper payment for an employee who has earned less than $1,500.00 gross per fortnight since 30 March 2020, you must ‘top up’ their fortnightly gross wage payment to $1,500 gross to be eligible for the Jobkeeper scheme.
Example
Jack currently earns $1,200 gross per fortnight. You will need to ‘top up’ Jack’s fortnightly payment to $1,500 gross (an additional $300) to qualify for the Jobkeeper scheme.
What if one of my eligible employees earns more than $1,500 per fortnight?
For your employees who are paid more than $1,500 gross per fortnight, you will pay them their normal fortnightly wage. Under the Jobkeeper scheme, you will only be reimbursed $1,500 gross per fortnight, per eligible employee.
3. Talk with your employees before directing them
Before directing your employees to do one or more of the items set out in Item 1 above, talk (consult) with them. Your directions must be reasonable. If you change an employee’s duties and/or their location of work, it must be because you believe the change is necessary for them to remain in employment. There are also Rules that you must comply with when directing your employees.
4. Jobkeeper payment rules (Part 6-4C - Division 2 – Employer payment obligations)
Pay your employees each fortnight
You must pay your eligible employees an amount that is equal to or, an amount that exceeds $1,500.00 gross per fortnight and withhold the appropriate amount of income tax.
For eligible employees who are paid more than $1,500 gross per fortnight, superannuation obligations (SGC payments) are the same.
For your eligible employees who receive a ‘top up’ payment from you to equal $1,500 gross per fortnight, under the Jobkeeper scheme you are under no obligation to make SGC payments on the ‘top up’ payment. It is your decision as to whether you pay SGC on any additional wages paid to your eligible employees who would normally receive less than $1,500 gross per fortnight, if it not for the Jobkeeper scheme.
5. Hourly rate of pay guarantee
An employee’s ordinary hourly rate of pay must not be reduced under the Jobkeeper scheme. You must continue to calculate your employees pay on their ordinary hourly rate of pay that they would have been paid, if you had not directed them to:
Jobkeeper rules relating to directing your employees (Part 6-4C - Division 6 – Rules relating to Jobkeeper directions)
Jobkeeper rules relating to continued service and accrual of leave entitlements
(Part 6-4C - Division 7 – Service and Division 8 – Accrual)
All service and accrual of leave entitlements remains as normal. As if, you had not given directions to your employee(s) to stand down, reduce their hours or to take leave.
For example:
Jobkeeper rules relating to continued service and accrual of leave entitlements
(Part 6-4C - Division 9 – Employee requests for secondary employment or training)
If one of your employees requests to take on another job with another employer, or requests training or professional development, you must consider the employee’s request and not unreasonably refuse the request.
Source - Coronavirus Economic Response Package Payments and Benefits Bill 2020 - Chapter 1 Amendment of the Fair Work Act 2009 – 9 April 2020
Australian Government – Economic response to Coronavirus – Jobkeeper payment – Frequently asked questions – 9 April 2020.
Check out these links for further information on the Jobkeeper scheme and the changes to the Fair Work Act:
Australia Government – Economic Response to the Coronavirus – Jobkeeper payment
Fair Work Ombudsman website – Coronavirus and Australia workplace laws – Jobkeeper changes to the Fair Work Act
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