Quantum of payment
Reimbursement and staff communication
The payment is in the form of reimbursement. It will only be payable where an employee has been paid a minimum of $1500 per fortnight by the employer. This may mean an employee is paid more than their usual wage. Where an employer makes an application in relation to an employee the employee must be informed of the application. Reimbursement will begin in May 2020 and be backpaid to 30 March 2020.
Eligibility for employers
Eligibility is based on a drop in turnover over a specified period. There is no requirement to provide evidence linking the drop explicitly to the effects of COVID-19. Turnover is linked to your method of GST reporting. Quarterly reporting businesses will use a quarterly comparison and businesses who report monthly use a monthly comparison. Businesses reporting quarterly may have an issue showing the required drop initially, however, you can provide an estimate for the purpose of the application.
The ATO has indicated there will be some tolerance around estimates for applications. You can make a good faith application if you reasonably expect to meet the threshold on estimated turnover.
The comparison is over a comparable period, eg, March 2019 compared to March 2020. There is no detail about what constitutes a comparable period currently. It should be a period which can be shown as reasonably appropriate for comparison.
You must show a drop in turnover of 30% in the period for eligibility (15% for not-for-profits).
Companies in receivership or voluntary administration are eligible to apply.
Eligibility for employees
Employees must also meet certain eligibility requirements.
Nationality: this scheme is only open to Australian citizens, permanent residents and certain New Zealand visa holders (sub class 444 visa and some other circumstances such as continued residence of ten years or more). Employees on employer sponsored visas (e.g, 457,482 and TSS visas) are not eligible.
Employment date: employees must have been employed on 1 March 2020. Anyone hired after that date will not be eligible. An employee whose employment was terminated after 1 March and has been rehired is also eligible
Employment status: full time and part time employees are eligible. Casual employees are only eligible if they have been employed on a regular and systematic basis for at least 12 months. Please note that the requirements for casual eligibility are based on other sections of the FW Act and this concept of a ‘permanent’ casual confers other rights on the employee under the act such as eligibility to make an unfair dismissal claim.
Contractors/self-employed/sole trader: provided they fulfil the turnover eligibility requirements those who are self-employed are also entitled to this payment on the same basis as an employee.
Salary requirements/means testing: there is no means testing or maximum salary cap on this payment. There is also no minimum salary requirement. This is a flat payment of $1500 per fortnight for each eligible employee.
Employees on sick leave
An employee on sick leave should be paid from their accrued sick leave and this payment does not apply to the period of sick leave.
Employees on Paid Parental Leave
Employees on paid parental leave are not eligible for this program and should be continued to be paid as normal.
Workers’ Compensation Payments
Employees receiving workers’ compensation payments are not eligible for this program unless they are completing some paid work, for example, completing a return to work program on reduced hours/modified duties.
For the purposes of accruing leave changes made in this period do not break continuity of service. Leave continues to be accrued.
Rehiring of redundant employees
An employee who has been made redundant can be rehired and become eligible for this program. The employee must have been employed at 1 March 2020. If the employee was paid a severance package this does not have to be repaid. However, the termination may break the employee’s continuity of service. Leave accruals will begin from a zero base and start accruing from the date of rehiring.
FW ACT CHANGES
In addition to providing financial support there has been a temporary relaxing of some aspects of the FW Act in order to facilitate stand down and reduction in salary and hours for employees. This section is only applicable where the employer has qualified for the JobKeeper program. If the employer has not qualified for the program the provisions of this section cannot be utilised.
Changes to an employee’s conditions of employment should be done following a consultation period and by written agreement. Where agreement cannot be reached a direction may be given by the employer in certain circumstances. Either party may notify a dispute to the Fair Work Commission where agreement cannot be reached or where a party may be acting unreasonably. The consultation period should allow the employee three days to consider the employer’s proposed changes to terms and conditions of employment. The consultation process should be recorded in writing and an employee request to include a representative should be accommodated. The employee may agree to the proposed changes without waiting for the consultation period to end.
Strategies available to the employer include:
INTERACTION WITH OTHER LAWS
All other sections of the FW Act and other legislative obligations, such as the unfair dismissal and discrimination regimes and occupational health and safety laws, remain in force and unaffected by these changes unless there is an explicit change.
Further information is also available on the Treasury website.