Last Friday, the Australian Taxation Office (ATO) and Treasury advised the Government of a reporting error in estimates of the number of employees likely to access the JobKeeper program. Read full article here (PDF).

The Australian Taxation Office is extending the time available for businesses to pay their employees, and still be able to claim back the first JobKeeper payments. 

Businesses suffering from a significant reduction in turnover due to COVID-19 will now have until 8 May 2020 to ensure all eligible employees have received a minimum of $3,000 in gross wages for the first two fortnights of the JobKeeper support period. 

Last week, to ensure the integrity and the efficient operation of the JobKeeper payment, the Government clarified the operation of payment rules. These updated rules were contained in e-Circular Issue 21 and further explained in the Jobkeeper Scheme Booklet posted on the Association’s website.

This extension allows businesses further time to consider their circumstances and remove any cashflow pressures arising from financing arrangements that have not been finalised. 

This means more businesses will be able to pay staff and still be eligible for JobKeeper payments, keeping more Australians connected to their workplace. 

Importantly, this extension does not negate the obligation on businesses to ensure they continue to pay eligible employees $1,500 in each JobKeeper fortnight. 

Around 900,000 businesses expressed interest in the JobKeeper scheme prior to enrolment. 

Enrolments opened at the start of last week and so far more than 500,000 businesses have enrolled covering more than 3 million employees. 

Businesses have until 31 May 2020 to formally enrol to claim JobKeeper payments. However, the sooner an employer pays their staff for April and enrols, the sooner the ATO can reimburse them the JobKeeper payments. 

Further information can be found at: www.ato.gov.au/general/JobKeeper-Payment

The JobKeeper Payment scheme is a wage subsidy to assist businesses that are significantly impacted by COVID-19. The purpose of the scheme is to help businesses to pay and retain their staff.

Under JobKeeper, eligible businesses that have suffered significantly reduced turnover will be paid $1,500 per fortnight (before tax), per qualifying employee, for up to six months.

The payments will commence from 1 May 2020 and will be backdated to 30 March 2020.

Employers must meet these conditions to be eligible for the JobKeeper Payment scheme:

• For businesses with an annual aggregated turnover less than $1 billion, the turnover of the business has reduced (or will reduce) by more than 30%.
• For businesses with an annual aggregated turnover greater than $1 billion, the turnover of the business has reduced (or will reduce) by more than 50%.
• For not-for-profits and charitable organisations registered with the Australian Charities and Not-for-profits Commission (ACNC), other than certain educational charities, the annual turnover of the organisation has reduced (or will reduce) by more than 15%.

Turnover for the purposes of a business’ eligibility is the entity’s projected GST turnover for a test period, and this is compared to the entity’s GST turnover for a relevant comparison period.

Eligible employers will be able to apply for the JobKeeper Payment through the ATO.

JobKeeper payments will be available for all employees that are employed by an eligible employer and who were employed on 1 March 2020. This includes full-time, part-time and long standing casual employees.

To be qualified, employees must meet the following criteria:

• Employees must currently be employed by an eligible employer. (Note: this includes employee’s who have been stood-down, or employees who were terminated but have been re-hired by the employer).
• Employees must have been employed by the employer on 1 March 2020.
• Employees must be employed full-time, part-time or as a ‘long-term’ casual (being a casual employee that had been employed on a regular and systematic basis for longer than 12 months as at 1 March 2020).
• Employees must be at least 16 years old.
• Employees must be an Australian citizen or permanent resident, or hold other specified classes of visa; and
• An employee can only have one employer receive JobKeeper Payments with respect to them (ie multiple employers cannot receive JobKeeper payments in respect of one individual, even if the individual is employed by multiple employers).

Employees are not qualified for JobKeeper payments:

• for periods in which they are in receipt of parental leave pay under the Paid Parental Leave Act 2010 (Cth).(Note: employees may receive JobKeeper payments if they are in receipt of paid parental leave from their employer pursuant to an enterprise agreement, contract of employment or similar instrument).
• for periods in which they are totally incapacitated for work and an amount is payable to them under workers’ compensation laws.
   

JobKeeper qualifying employers are required to meet minimum payment obligations for those employees who are subject to a JobKeeper direction or request.

These include ensuring that at least the value of JobKeeper payments an employer receives is passed on to employees each fortnight, or the amount they would receive for the work they have performed, whichever is greater.

Employees who are usually paid less than $1,500 per fortnight will be entitled to the full $1,500 payment, so may actually receive more under JobKeeper than they might ordinarily earn.

Employees usually paid more than $1,500 per fortnight and who are required to work for hours that would result in earnings higher than $1,500 per fortnight should be paid the balance of their wages by the employer.

The changes made to the FW Act give employers temporary powers to implement flexibility measures in order to save jobs.

These powers allow employers to:

• issue JobKeeper enabling directions, including directions requiring to employees to: 
  • work reduced hours or days (a JobKeeper enabling stand down direction);  
  • undertake alternate duties; or
  • work at an alternate location;
• request employees to work reduced days or alternate hours of work;
• request employees to take accrued annual leave; and
• agree with employees for annual leave to be taken at half pay.

Employers can request employees to work reduced days or alternate hours of work, and also request that employees take accrued annual leave (provided that their leave balance does not reduce to below 2 weeks).

If an employer makes such a request of an employee, the employee must not unreasonably refuse the request.

A JobKeeper enabling stand down direction allows an employer to direct an employee to:

• not work on a day or days on which the employee would usually work; or
• work for a lesser period than the period which the employee would ordinarily work on a particular day or days; or
• work a reduced number of hours (compared with the employee’s ordinary hours of work), including reducing hours to nil.

During a JobKeeper enabling stand down, the employer must:

• pay the employee each fortnight at least the greater of:
  • the $1,500 JobKeeper payment; or
  • the amounts payable to the employee in relation to the performance of work during the fortnight (including all wages, allowances, loadings, penalties, etc); and
• not reduce the employee’s ordinary hourly rate of pay for each hour of work performed.

However, a JobKeeper enabling stand down direction can only be given, among other restrictions, if the employee cannot be usefully employed for their normal days or hours of work because of changes to business attributable to:

• the COVID-19 pandemic; or
• Government initiatives to slow the transmission of COVID-19.

When a JobKeeper enabling stand down direction is given to an employee, the employer must not unreasonably refuse a request by that employee:

• to engage in reasonable secondary employment; or
• for additional training or professional development.

What are the other types of JobKeeper enabling directions?

Two other types of JobKeeper enabling directions are available to employers, being a direction to:

• undertake alternate duties; or
• work at an alternate location.
   

A JobKeeper enabling direction given to an employee to stand down, undertake alternate duties or work at an alternate location, will be of no effect if either:

• the direction is unreasonable in all of the circumstances; or
• the consultation obligation has not been complied with.

The consultation obligation for JobKeeper enabling directions requires an employer:

• to give an employee at least 3 days’ written notice of its intention to issue the direction; and
• to consult with the employee (or their representative) prior to giving the direction.

A JobKeeper enabling direction given to an employee to undertake alternate duties or work at an alternate location, will also be of no effect unless the employer has information before them that leads them to reasonably believe that the direction is necessary to continue the employment of one or more employees of the employer.

All JobKeeper enabling directions will cease to have effect at 12.00 am on 28 September 2020, unless removed prior to that time.
 

Employees subject to a JobKeeper enabling direction will continue to accrue and take service-related entitlements as if the direction had not been issued.

This means that employees will continue to accrue annual and personal leave at their usual rate, and will be entitled to service related entitlements such as redundancy pay and payments in lieu of notice as if they were working their usual hours of work.

Employers, employees and their representatives may raise disputes with the Fair Work Commission (FWC) about JobKeeper requests and directions.

The FWC may deal with disputes in whatever way it sees fit, including by arbitration (meaning that it can make decisions that are binding on the parties).

In dealing with a dispute, the FWC must take into account fairness between the parties concerned.

An employer will be subject to stiff fines (up to $63,000 per contravention for companies and up to $12,600 per contravention for an individual) if it tries to give a JobKeeper enabling direction that the legislation does not allow and the employer knew that this was the case.

JobKeeper payments to employees are taxable like other payments to employees, and PAYG withholding obligations will apply. The $1,500 payment is before tax.

For payments made to cover an employee’s usual wages, superannuation is payable according to the ordinary rules for payments to employees for ordinary time earnings.

For payments (or parts of payments) to employees in excess of an employee’s usual wages, superannuation is not required to be paid. This situation may arise where:

• an employees’ usual wages are less than $1,500 per fortnight (ie superannuation would be payable on the part of the $1,500 payment necessary to cover the employee’s wages, but not on any windfall balance); or
• employees have been stood down without pay (ie superannuation will not be payable on the $1,500 JobKeeper payment paid to employees as it is not paid as ordinary time earnings for work that has been undertaken).

Eligible businesses can apply for the payment online and are able to register their interest via www.ato.gov.au

JOBKEEPER’ CHANGES TO THE FAIR WORK LAWS OVERVIEW AND FAQ’S

Supporting businesses to retain jobs (PDF)

JobKeeper payment - Information for employers (PDF)

JobKeeper payment - Information for employees (PDF)

JobKeeper Payment - Frequently Asked Questions (2/5/20) (PDF)

Contact Master Builders on 02 8586 3555 for further information and advice.