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!
Under the Jobkeeper scheme, eligible employers (you) can:
- retain your employees
- receive a Jobkeeper payment of $1,500.00 gross (maximum amount under the Jobkeeper scheme) for each employee. For an employee to be eligible to receive the Jobseeker payment, they must be recorded as being on your payroll as at 1 March 2020 and continue to be employed while you are receiving Jobkeeper payments. First payments will be paid by the ATO in the first week of May 2020.
Are your employees ‘eligible employees’?
An eligible employee:
- is currently employed by you (including any employees you may have stood down or re-hired)
- is employed by you on a permanent basis (full-time or part-time)
- is a casual employee employed by you and who has worked on a regular and systematic basis for longer than 12 months as at 1 March 2020. Importantly, your casual employees must not be employed on a permanent basis (full-time or part-time) with any other employer
- is aged 16 years or older on 1 March 2020
- is an Australian citizen, the holder of a permanent visa, or a Special Category (subclass 444) visa holder on 1 March 2020
- is a resident for Australian tax purposed on 1 March 2020
- is not receiving a JobKeeper payment from any other employer.
Changes in the Fair Work Act are temporary
(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.
What are the changes?
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:
- stand down (includes reducing hours of work)
- perform alternative duties
- perform work at another location
- work on different days and times
- take paid annual leave at half pay
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.
What are the rules?
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:
- Stand down
- Perform other duties or work at another location
- Change their work days and/or times
- Take annual leave at half pay.
Jobkeeper rules relating to directing your employees (Part 6-4C - Division 6 – Rules relating to Jobkeeper directions)
- Talk (consult) with your employees and keep a written record of the conversation.
- Provide a minimum of 3 days written notice to the employee of your intention to give a direction (a lesser period if genuinely agreed between you and the employee).
- A direction must be reasonable and in writing (by email is acceptable).
- A direction continues to be in place until it is withdrawn by you. You may give the employee a new direction and/or replace the existing direction.
- Your employees are obligated to comply with your reasonable direction(s).
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:
- If you direct an employee to stand down, reduce their hours of work or to take leave, this time is counted as continued service.
- Your employees continue to accrue their leave entitlements as normal.
- If it becomes necessary for you to make positions redundant, you must follow the redundancy process – consult with the employees affected, provide notice and redundancy pay (if applicable) as normal.
- Any employees taking half pay, agreed between you, will continue to accrue leave entitlements as normal.
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
These are tough times. Ulton is here for you.
If you require assistance about the Jobkeeper scheme and the changes to the FW Act (What you can and can’t do) contact our HR Consultant, Christine Guy direct on (07) 4154 0413 or mobile 0407 588 194 or email cguy@ulton.net
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