The world of employment law is constantly evolving and ever-changing.  This year alone has seen the compulsory introduction of Single Touch Payroll and a number of very important employment law updates.  If you take your eyes off the ball, it’s likely you will miss something and may find yourself and your business in trouble with the ATO.  We round up the most recent changes in Australian employment regulations to keep you informed and always in line with your business requirements.

Single Touch Payroll (STP)

From 1 July 2018, the Australian government enacted STP legislation for Australian business with 20 more employees.  It stipulates that employers are to submit payroll and superannuation data to the ATO each time they complete a payroll run. The easiest way to do this is to use payroll software that is STP compliant.  From 1 July 2019, the legislation was expanded to become a requirement for businesses with 19 employees or less, making it compulsory for businesses of all sizes to comply with ATO reporting requirements.

These new changes allow the ATO to have far greater visibility into a business, promoting full compliance with tax laws and regulations and a way to streamline end of financial year processes.  Because of STP, employers no longer need to produce payment summaries or conduct other admin tasks related to the EOFY process.

The ATO is also using the data gathered from STP to warn employers who appear not to be paying the required their superannuation payments on time, in full or at all, to change their behaviour in line with Superannuation Guarantee (SG) obligations.

The Institute of Public Accountants general manager of technical policy Tony Greco explains, “Now that the ATO has got a large chunk of the population on Single Touch Payroll, it is a reminder that they have more timely robust data around who’s making contributions and when.

“Now that they have transparency, it’s a warning to say, don’t get lax with SG, because we’re watching. I think it’s appropriate, just to remind people, that they have that rich data coming through on a pay cycle basis that it’s not going to be too long before, they will notice those flags to indicate non-compliant employers, and therefore, don’t assume the laxity of the past to be part of the future.”

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 three percent, taking effect from the first full pay period after 1 July 2019.  This has seen 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.  The increase applies to base pay rates affecting 2.2 million workers who are on the lowest pay rates.

The three percent increase applies to employees whose pay rates are determined by the national minimum wage or a modern award.  The national minimum wage applies to employees who aren’t covered by an award or agreement including any employees who earn more than the high-income threshold.  The increase won’t affect employees who already get paid more than the new minimum wage.

Visit find my award if you’re not sure which award applies to your staff.  If your workers are covered by a registered agreement, you should check it to see whether this increase is applicable.

Changes to some penalty rates

There have been further changes to penalty rates in some hospitality and retail awards from 1 July 2019, following a Commission decision in 2017.  Visit the Fair Work Ombudsman’s penalty rates page for more information about what the changes are, who they affect and how they’ve been implemented.

A reduction to public holiday and Sunday penalty rates under certain modern awards have also taken effect from 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.
Superannuation

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 each employee with their contract of employment.

Next Steps

It’s very important that all organisations are across these employment law updates. 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.

The team of business consultants at Business 360 can help employers achieve peace of mind on employment practices.  Contact David Reid today to discuss how their team may be able to assist you.