We have summarised some of the key changes and important reminders, below.
These relate to:
- the Superannuation Amnesty
- Victoria’s new wage theft bill
- changes to the portable long service benefits scheme
On 6 March 2020, the Federal Government introduced a one-off superannuation guarantee amnesty in the form of the Treasury Laws Amendment (Recovering Unpaid Superannuation Act 2020). The amnesty provides employers with six months to disclose and backpay any Superannuation Guarantee (SG) shortfall, with only nominal interest.
The benefits of the amnesty can be claimed for any unpaid Super Guarantee Charge (SGC) for quarters starting from 1 July 1992 to 31 March 2018. Any disclosure (and back payment) made by an employer for this period will be tax deductible (if made before 7 September 2020) and free of penalties and administrative fees.
If you have already disclosed unpaid SGC to the ATO between 24 May 2018 and 6 March 2020 you do not need to apply again.
To be eligible for the amnesty, an employer must:
- not be under investigation by the ATO for superannuation obligations for the quarter to which the disclosure relates
- disclose any SG shortfall that has not already been disclosed for the relevant quarter(s) (from 1 July 1992 to 31 March 2018)
- lodge an Amnesty form with the ATO by no later than 7 September 2020.
If after the amnesty period expires, you are subsequently identified by the ATO as non-compliant you will not be eligible for the amnesty and will need to pay administrative fees ($20 per employee per quarter); a Part 7 penalty (up to 200% of the SGC), as well as the nominal interest and SG shortfall.
On this basis, we recommend you undertake an assessment of your business to ensure that any relevant underpayments can be rectified as soon as possible. We also remind you that some contractors are entitled to superannuation.
If you would like further information about the amnesty (or whether your contractors are entitled to superannuation), please get in touch with us and we can refer you to a member of our superannuation team.
NFP organisations and charities that meet the eligibility requirements can participate in the Government’s JobKeeper payment scheme. If you would like more information on whether your organisation qualifies for JobKeeper, refer to our previous eAlert.
In summary, however, NFPs are generally subject to the same eligibility requirements as other businesses, except that their estimated annual turnover need only fall by 15% or more (relative to their turnover in the corresponding period a year earlier). If an organisation was not in operation a year prior, or turnover a year prior was not representative of its usual turnover, the Tax Commissioner has discretion to consider additional information provided by the NFP to demonstrate that it has been affected by COVID-19.
Further, NFPs may exclude government revenue from the turnover test. This will ensure that organisations delivering significant services do not inadvertently become ineligible for the JobKeeper payment because they have received a government grant. If an NFP does exclude government revenue from the turnover test, the NFP can decide whether or not to nominate employees for JobKeeper whose positions are fully funded by government grants.
Enrolment dates for JobKeeper close on 31 May 2020.
In addition to receiving JobKeeper, the Federal Government is also providing additional support for NFPs, including as set out here.
Application to vary SCHADS Award
On 8 April 2020, the Social, Community, Home Care and Disability Services Award 2010 (SCHADS Award) (in addition to 98 other awards) was varied at the initiative of the Fair Work Commission to insert an additional Schedule X to introduce measures that will apply during the COVID-19 pandemic. The amendments (in effect until 30 June 2020) introduce clauses dealing with:
- unpaid pandemic leave
- annual leave at half pay.
On 28 April 2020, a number of unions applied to vary the SCHADS Award, to include a new COVID care allowance of approximately $5 per hour. This would apply if an employee were required to work with a client in a number of circumstances, including where the client has (or is reasonably expected of having) COVID-19, or is required to quarantine or self-isolate. A hearing took place on 4 May 2020. No decision has yet been issued.
Maddocks has produced guides on legal issues raised by the Coronavirus which may be of interest, and we encourage you to share these with colleagues who may also find them useful.
Victoria’s new wage theft bill
In March 2020, the Victorian Government introduced the Wage Theft Bill 2020 (the Bill) to protect vulnerable workers by criminalising the underpayment of employee entitlements.
If the Bill is enacted, employers who dishonestly withhold wages, superannuation or other entitlements will face substantial financial penalties of up to $198,264 and up to 10 years’ imprisonment for individuals; and fines of up to $991,320 for companies.
Together with the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017, which introduced penalties for serious contraventions of up to $126,000 for individuals knowingly involved and $630,000 for organisations, this means it is now more important than ever to audit your employee’s wages and ensure that they are being paid all of their entitlements under the relevant award or agreement, including for overtime.
As many NFP organisations are covered by the SCHADS Award it is also essential when determining rates of pay to keep in mind that an Equal Remuneration Order (ERO) applies to social and community services employees covered by the SCHADS Award. In practice, this means that these employees are entitled to increasingly higher rates of pay than those stated in the SCHADS Award.
The transitional payments provided for in the ERO (which commenced in 2012) will be fully applied by the end of 2020.
The Fair Work Ombudsman has produced some helpful pay guides to help navigate the complex pay scale resulting from the ERO. However, if you would like assistance with reviewing the classification or entitlements of your employees, please get in touch with a member of our Employment, Safety & People team.
Likely changes to the Portable Long Service Benefits Scheme
The Victorian Government has recently opened up consultation on the proposed new Long Service Benefits Portability Regulations. An exposure draft of the Regulations is available for public consultation here.
According to the Government’s website, the draft Regulations are different from the currently applicable Interim Regulations, with the most significant changes being:
- abolishing the 'employee predominance test' for the community services sector and replacing it with a test based on award coverage
- treating community health centres and women’s health services in the same way as other service providers. This will mean that they will be covered if they provide a service that is a community service, and if they employ persons under the relevant awards. Employers for those services will only have to pay the levy for their eligible workers performing community service work.
Submissions on the Regulations are due by 5.00pm on 27 June 2020.