HHG Legal Group’s Employment Law team’s Murray Thornhill and Gemma Wheeler-Carver provide an update on what employers need to know about the JobKeeper subsidy following its extension to the end of March 2021.
In late July, the Australian Government announced that due to the second wave sweeping across the country’s east coast and the slower than expected recovery in other states, the JobKeeper Payment scheme would be extended by a further six months until 28 March 2021.
21 July – extension announced
31 August – make payments to newly eligible employees (wage condition)
31 August – enrol for August fortnights
28 September – JobKeeper 1.0 ends and reassessment for eligibility based on July – September quarter
28 September – current JobKeeper directions automatically end (unless extended)
3 January 2021 – reassessment for eligibility based on October – December quarter
Is my business still eligible for JobKeeper after 28 September 2020?
All businesses currently claiming JobKeeper will need to re-assess their eligibility for the initial extended period, from 28 September 2020 to 3 January 2021. This is done with reference to actual turnover in July – September quarter. A further re-assessment will be required for businesses wishing to extend past 3 January (for the period ending 28 March 2021), and businesses will need to show the relevant decline for the October – December quarter.
Which staff are eligible?
All employees employed as at 1 July 2020 may now be assessed for eligibility, but otherwise, the eligibility requirements remain the same.
In short, employees who are:
- currently employed;
- either full-time, part-time, or a long-term casual (on a regular and systematic basis);
- 18 years old or older, or 16 or 17 years old if independent or not undertaking full-time study;
- Australian resident;
- Not receiving government parental payments or workers compensation; and
- Not claiming JobKeeper with another employer.
Self-employed individuals may also still be eligible where they are not engaged by another employer on a permanent basis.
This means that some employees that previously weren’t eligible may now be eligible. Some examples include casuals who had not been employed for 12 months as at 1 March 2020, staff employed after 1 March 2020 but before 1 July 2020, or employees who have turned 16 years old or become independent since last assessed.
JobKeeper 2.0 remains a “one in, all in” approach by the ATO, meaning that any employees that previously weren’t eligible but are now, will need to notified and provided a consent form to sign. For all new employees who weren’t previously eligible, employers must ensure that they make the first two fortnights of payments before 31 August 2020, prior to the first round of payments for those employees, in order to meet the wage condition. For all other employees, payments should continue to be paid in the same way as previously.
Until the 28 September fortnight, the payment rates remain at $1,500 per fortnight. If employees are stood down or working fewer hours, employers must ensure that those employees receive the full $1,500 and continue to do so until 28 September. From 28 September 2020, the payments rates are changed as follows:
- From 28 September 2020 to 3 January 2021, the rates will be:
- $1,200 per fortnight for all employees working 20 hours or more on average in the pay period before 1 March 2020 or 1 July 2020 (whichever is higher);
- $750 per fortnight for all other employees
- From 4 January 2021 to 28 March 2021, the rates will be:
- $1,000 per fortnight for all employees working 20 hours or more on average in the pay period before 1 March 2020 or 1 July 2020 (whichever is higher);
- $650 per fortnight for all other employees
JobKeeper directions and Award flexibility
Employers are still able to issue JobKeeper directions up to 28 September (see our previous article here). These directions automatically terminate (under the current legislation) for federal system employers on 28 September 2020. Currently, no amendments have been made to extend these provisions in the Fair Work Act, but we anticipate that the flexibility provisions will be extended for those businesses that remain eligible for JobKeeper. Whether employers who cease being eligible are also included in this extension remains to be seen. Employers in the State system also have similar flexibility provisions which have not yet been extended past 28 September.
In addition, many Awards have been amended to reflect extended flexibility provisions, including for pandemic leave and arrangements for taking annual leave. We have previously written about those changes in our article from April 2020.
HHG Legal Group can assist
It is important for businesses to get early and specific legal and financial advice on these matters before enrolling in the scheme to avoid running into financial or legal issues at a later stage. HHG Legal Group and our taxation and accounting partners can provide speedy advice on these issues and more
For over 100 years HHG Legal Group has been proudly serving Western Australian families, business and individuals. Never before has the State seen such a crippling time for many small businesses and we are committed to supporting the communities in which we operate. If you require advice relating to your obligations as a small business employer in the time of COVID-19, or have any other employment law queries, we are offering unprecedented initial consultation fees to assist in these challenging times.
Make an enquiry online or book a telephone, video or safely distanced meeting with an employment lawyer on +61 8 9322 1966