If you’ve been on the edge of your seat waiting for the government to set their JobKeeper promises in stone, wait no more.
In the last 24 hours, important bills to help Aussies stay afloat have become law, representing $130 billion worth of hope for Australian businesses and the people who rely on them.
Already, the JobKeeper package has over 700,000 registrations and is expected to be received by around six million employees. Will you be one of them?
Today we’ll explain exactly what JobKeeper entails, if and how you qualify, plus important amendments to the Fair Work Act - arming you with all the information you need to make the most of this financial reprieve.
HOW JOBKEEPER BECAME LAW
On Wednesday 8 April 2020, parliament passed the Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 and the Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020, making the JobKeeper package law.
This Coronavirus Economic Response package is designed to help Australian businesses weather the pandemic and keep their employees employed - mitigating COVID-19’s impact on everyday people, suddenly bereft of certainty.
WHAT IS THE JOBKEEPER PAYMENT?
JobKeeper supports employers directly or indirectly affected by COVID-19 to keep and pay their staff.
According to the Government, this $1,500 per fortnight per “eligible employee” payment is the equivalent of about 70% of the median Australian wage (and up to 100% of the median wage in some of the most heavily affected sectors such as retail, hospitality and tourism).
It will be made available to eligible businesses, not-for-profits and sole traders starting March 30 2020 until 27 September 2020.
ARE YOU ELIGIBLE?
There are more specific rules around eligibility yet to be released, but here’s what we’ve learned from the Treasury so far:
Employers (including not-for-profits and self-employed persons) will be eligible if:
- Your business has an annual turnover of less than $1 billion and you estimate your turnover has (or will likely) fall by 30% or more.
- Your business has an annual turnover of $1 billion or more and you estimate your turnover has (or will likely) fall by 50% or more.
The fall is compared to the same month or 3 months (depending on the reporting pattern of the business) of last year. However, the Tax Commissioner does have discretion to consider other information and to set alternative tests to establish eligibility in specific circumstances. There will also be some leeway where employers estimate, in good faith, that the business will have a greater than 30% (or 50%) fall in turnover, but their numbers show a reduction of slightly lower than this threshold.
An “eligible employee” is someone who is:
- Currently employed by the employer (including where stood down or re-hired by the same employer).
- Was employed by the employer as at 1 March 2020.
- Is a full-time, part-time or a long-term casual (employed on a regular and systemic basis for longer than 12 months) as at 1 March 2020.
- 16 years of age or older.
- An Australian tax resident as at 1 March 2020.
- Not receiving a JobKeeper payment from another employer.
WHAT DOES THE EMPLOYER NEED TO DO?
Qualify for JobKeeper? Here are your next steps:
- Provide the ATO with the number of eligible employees engaged as at 1 March 2020 (keeping in mind that if you’re a sole trader, it might be just one: yourself).
- Make sure that each eligible employee receives at least $1,500 per fortnight
- (before tax). Where an employee usually earns less than $1,500, simply pay the minimum $1,500 amount. Where the employee earns more than $1,500, use the $1,500 towards their wage.
- Let your eligible employees know that they’re receiving the JobKeeper Payment. Important in case they are applying for other relief as well.
HOW TO REGISTER FOR JOBKEEPER
The JobKeeper payments will administered by the ATO, so if you want to receive them simply head to the ATO website and register your interest. You’ll be sent reminders and notifications once you’re in the system.
THE FIDDLY STUFF: OVERPAYMENTS AND RECORD KEEPING
Staying organised and within the bounds of eligibility is wildly important for avoiding problems down the line.
If you’ve been overpaid because you weren’t entitled, or entitled to less, you’re liable to repay the government plus interest.
As for record keeping, it’s essential that you keep all information about the JobKeeper payment for five years. The Commissioner of Taxation has the power to request these records, so file them somewhere safe.
FAIR WORK AMENDMENTS
Because maintaining jobs and sustaining Aussie businesses is the name of the game, some (temporary) changes have been made to the Fair Work Act.
If you’re an employer who qualifies for JobKeeper, you can:
- Give directions to an employee about the duties they perform, provided:
- These directions are safe with respect to the nature and spread of COVID-19.
- The duties are reasonably within the scope of the employer’s business.
- Give directions to an employee about the location of their work (as in, working from home or similar emergency measures), provided:
- The place for work is suitable for the duties.
- The performance of the duties is safe at this place.
- If the place isn’t the employee’s home, it doesn’t require the employee to travel an unreasonable distance.
- Enter into an agreement with an employee in regards to the days or times they work.
- This doesn’t mean you can reduce the total number of hours worked.
- Your employee cannot unreasonably refuse the request.
- Enter into an agreement with an employee in relation to annual leave.
- This cannot result in the employee having less than two weeks leave remaining.
- The employee cannot unreasonably refuse.
IMPORTANT CONSIDERATIONS FOR EMPLOYERS
Right now, being reasonable in negotiations and work arrangements is imperative. If you need to give new directions to your employees, you must provide them in writing with at least three days’ notice (unless the employee agrees to shorter notice). All directions cease to apply on 28 September 2020.
If you ask an employee not to work on a particular day, or to work for a shorter period or number of hours due to COVID-19 related changes, and at the date they were entitled to a JobKeeper payment, you must still make the payment.
We hope this information provides hope and clarity around government payments - and what you’re entitled to - as the COVID-19 pandemic unfolds. If you’re still unsure if it applies to your business, give us a call on +61 2 8880 9383 or email us at metis_at_metislaw.com.au.