A new financial year means annual indexation and key changes relevant to the employment law sphere for all organisations to consider.
We’ve summarised the most important changes for organisations as of 1 July 2019.
National Minimum Wage and Modern Award Minimum Wage
The Fair Work Commission determined that both the national minimum wage and the modern award minimum wage would increase by 3.0%, taking effect from the first full pay period after 1 July 2019.
This will see an increase of the national minimum wage from $719.20 per week to $740.80 per week or $18.93 per hour to $19.49 per hour.
Note that modern awards do not apply to an employee who earns more than the high income threshold.
The high income threshold under section 382 of the Fair Work Act 2009 (Cth) operates as a limit to an employee’s eligibility to be protected from unfair dismissal.
The threshold has been increased from $145,400 to $148,700.
This means that employees who earn more than $148,700 and are not covered by an award cannot claim unfair dismissal.
This increase also means that the maximum cap for unfair dismissal compensation will increase to $74,350, equal to 26 weeks’ pay (previously $72,700).
The maximum superannuation contribution base has also increased from $54,030 to $55,270 per quarter (or $221,080 per annum), which means that earnings above this amount are not subject to compulsory contributions.
The superannuation guarantee remains at 9.5%.
Fair Work Information Statement
A reminder that the Fair Work Information Statement must be provided to employees when they commence employment. Ensure that you attach the updated version for 2019-2020. You can access the link to the new Statement here.
Portable Long Service Leave
Portable long service leave makes it fairer and easier for Victorians working in particular industries to access long service leave benefits and retain their entitlement even after they change employers.
Under the Long Service Benefits Portability Act 2018 (Vic) workers in:
- community services;
- contract cleaning; and
- the security industry
will benefit from the accrual of portable long service leave when changing employers, as long as they remain in the same industry.
Businesses that employ workers in these industries must register their business with the Portable Long Service Leave Authority between 1 July and 30 September 2019. Registration can be done online at the Portable Long Service Leave Authority website.
Employers must submit a Quarterly Return to the Authority, in October, January, April, and July each year. The first Quarterly Return must be submitted in October 2019.
What to include in the quarterly return?
Relevant employers will be required to provide:
- information about all workers who have worked for the business during that quarter;
- the days they have worked during the quarter; and
- the pay they received during the quarter.
How much will it cost?
The Governing Board of the Portable Long Service Benefits Authority has determined the Employer Levy as follows:
- 1.65% for community services;
- 1.80% for contract cleaning; and
- 1.80% for security.
This represents a percentage of the employee’s ordinary pay. The Quarterly Return calculates the contribution to be made by the employer and is based on each worker’s ordinary pay multiplied by the levy for their industry.
The employer contributions are then invested by the Authority and will be used to pay workers when they make a claim for long service.
Our Workplace Relations team can assist in determining on whether your organisation will be effected by these changes.
A reduction to public holiday and Sunday penalty rates under certain modern awards have also taken effect as of 1 July 2019. The applicable awards include:
- Hospitality Industry (General) Award 2010;
- Restaurant Industry Award 2010;
- General Retail Industry Award 2010;
- Fast Food Industry Award 2010; and
- Pharmacy Industry Award 2010.
Tax Free Threshold – “Genuine Redundancy” Payments
The tax free threshold for genuine redundancy payments has also increased. The first $10,638 will be tax free and then a further $5,320 for each completed year of service.
It’s so important that all organisations are across these changes. Compliance with employment law can be an extremely complex task and it’s essential that you have the right advice to avoid a claim down the track.