On 8 April 2020 the Australian Government passed legislative instruments and rules relating to the JobKeeper Program. The key information has been summarised below.
1. What is the JobKeeper scheme?
- Eligible employees can access a wage subsidy of $1,500 per fortnight for up to six months from 30 March 2020 until 27 September 2020.
- The subsidy will start on 30 March 2020, with the first payments to be received by employers via ATO to the relevant nominated bank account of employer in the first week of May 2020.
2. Eligibility criteria for employers
- Employers are eligible if their business has an annual turnover of <$1B and they estimate their turnover has fallen or will likely fall by 30% or more or, for businesses with an annual turnover of >$1B and a turnover drop of 50% or more, over the “turnover test period”.
- An employer satisfies the decline in turnover test at a time if the employer’s projected GST turnover for a turnover test period (see below) in which the test time occurs is less than the employer’s current GST turnover for a relevant comparison period (see below).
- That is, turnover is calculated as it is for GST purposes and is reported on Business Activity Statements. It includes all taxable supplies and all GST free supplies but not input taxed supplies. There will be some tolerance where employers, in good faith, estimate a 30% or more or 50% or more fall in turnover but actually experience a slightly smaller fall.
- The “turnover test period” is:
- A calendar month that ends after 30 March 2020 and before 1 October 2020; or
- A quarter that starts on 1 April 2020 or 1 July 202; and
- The relevant comparison period in 2019 that corresponds to the turnover test period above.
3. Eligible employees
- Eligible employees may be full-time, part-time or casually (the latter employed on a regular and systematic basis for longer than 12 months) as at 1 March 2020.
- Fixed-term contractors are also eligible if they were employed at 1 March 2020 and meet the other eligibility criteria.
- Employees on paid parental leave will not be eligible.
- Employee must be an Australian citizen, the holder of a permanent visa, or a Special Category (subclass 444 – New Zealand Citizen) Visa Holder as at 1 March 2020.
- Eligible employees who have been stood down by their employers before the commencement of the scheme will be eligible. Employees that are re-engaged by a business that was their employer on 1 March 2020 will be eligible.
4. Employers can vary hours of work or duties of their staff
- Employers can present staff with written “stand down direction” (form not prescribed), and will be empowered to unilaterally direct employees to work for a lesser period or for fewer hours than the employee would ordinarily work (including nil hours) or perform new duties not strictly outlined in their job description, within reason. To do this, the employer must give the employer at least 3 days’ written notice of the intention to give any direction or written notice of a lesser period by genuine agreement between the parties. Importantly, this stand down direction has effect despite a designated employment contract provisions to the extent of any inconsistency.
- That is, employers can reduce their employees’ hours until their earnings equal $1,500 per fortnight. The Government will provide $1,500 per employee per fortnight before tax for up to 6 months. Employers can elect to top-up the payment, but must pay $1,500 at minimum.
- However, any JobKeeper directions issued by the employer to the employee cannot reduce an employee’s base hourly rate of pay. That means, even if employer directs employees to change their duties, the employer must ensure that the employee’s base rate of pay (worked out on an hourly basis) is not less than the base rate of pay (worked out on an hourly basis) that would have been applicable to the employee if the written direction had not been given to the employee.
- Employers can tell their employees to work in different roles or locations as long as these are safe, within employees’ skills and not too far from their current workplace and “reasonably within scope of the business”. The employer must have information to support a reasonable belief the direction is necessary to continue the employment of one or more employees.
- Employees who lose hours will be able to apply for a second job, however they can only receive JobKeeper payments via the primary employer.
5. What about annual leave?
- The employer and employee can agree (despite any designated employment contract provision) to the employee taking twice as much annual leave at half the employee’s rate of pay for a period. Employers can also ask employees to change the days they work and take annual leave.
- Employees may refuse if they have a “reasonable” excuse. All employees can keep 2 weeks of leave in reserve.
- An employee who is subject to a JobKeeping stand down direction accrues leave entitlements as per usual as if the direction had not been given, and any entitlement to redundancy pay and payment in lieu of notice of termination are to be calculated as if the direction had not been given.
- An employment who takes annual leave at half pay as agreed with their employer also accrues leave entitlements as if the direction had not been given, and any entitlement to redundancy pay and payment in lieu of notice of termination are to be calculated as if the direction had not been given.
6. Can a stood down employee ask for secondary employment?
- Yes, an employee could ask their employer who qualifies for the JobKeeper payment scheme in a range of circumstances for permission to engage in reasonable secondary employment, training or professional development. If an employee who is subject to a stand down direction makes such a request, the employer should consider and not unreasonably refuse such requests.
7. No requirement to pay Superannuation Guarantee Payments
- No superannuation guarantee payments are required to be paid on any additional payment made because of a JobKeeper payment.
8. Payment mechanics from the ATO
- Payments will generally be paid by the ATO by crediting the amount of the payment to the bank account nominated for tax refunds, etc of the employer.
9. Record keeping and ATO compliance requirements
- The program will be subject to ATO compliance activities and audits. There will be a positive obligation on employers to establish their eligibility and that of their employees.
- Noncompliance such as failure to pass on the JobKeeper payment to employees could subject companies to fines of up to $126K and could also face civil penalties up to $126K if the employer knowingly misuse new powers granted to them under the legislation.
10. What recourse will eligible employees have against their employer?
- Employees will have recourse to the Fair Work Commission if they believe their employer has not followed to new rules. The JobKeeper Payment does not remove any workplace protections for employees.
For more information, including the latest Fact Sheets and FAQs, visit treasury.gov.au/coronavirus/jobkeeper.
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