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JobKeeper Update

This week there has been some further clarification to the rules around the JobKeeper payment. Below is a summary of areas that may affect your business.

JobKeeper extension of time to enrol for the scheme

The Commissioner has extended the time to enrol for the initial JobKeeper periods, from 30 April 2020 until 31 May 2020.

If you enrol by 31 May you will still be able to claim for the fortnights in April and May, provided you meet all the eligibility requirements for each of those fortnights. This includes having paid your employees by the appropriate date for each fortnight.

For the first two fortnights (30 March – 12 April, 13 April – 26 April), they will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by 8 May 2020. If you do not pay your staff by this date, you will not be able to claim JobKeeper for the first two fortnights.

JobKeeper eligibility rules

To ensure the integrity and the efficient operation of the JobKeeper payment the Government is clarifying the operation of the rules:

  • Employees employed through a special purpose entity, rather than an operating entity: Changes will address the circumstances where business structures use a special purpose entity to employ staff rather than staff being directly employed by an operating entity. The Government will provide an alternate decline in turnover test for the eligibility of special purpose service entities that provide employee labour to group members and that have not met the basic test for decline in turnover. This alternate test will apply where an entity provides the services of its employees to one or more related entities, where those related entities carry on a business deriving revenue from unrelated third parties. The alternate test will be by reference to the combined GST turnovers of the related entities using the services of the employer entity.

  • ‘One in, all in’ principle: Once an employer decides to participate in the JobKeeper scheme and their eligible employees have agreed to be nominated by the employer, the employer must ensure that all of these eligible employees are covered by their participation in the scheme. This includes all eligible employees who are undertaking work for the employer or have been stood down. The employer cannot select which eligible employees will participate in the scheme. As noted in the explanatory statement to the existing rules, this ‘one in, all in’ principle is already a key feature of the scheme and will be made clearer in the rules.

  • Full time students aged 16 and 17 years old: As noted in the explanatory statement to the existing rules, the benefit of the JobKeeper payment to workers over the age of 16 is justified for those who are financially independent and who require the security provided by participation in the JobKeeper scheme and the maintenance of the working relationship that it affords. The rules will provide that full time students who are 17 years old and younger, and who are not financially independent, are not eligible for the JobKeeper Payment. This clarification will apply prospectively, which would mean an eligible employer that has already met the wage condition of paying such an employee $1,500 for a fortnight could be entitled to a JobKeeper Payment in arrears for that fortnight.

Banks have agreed to bring JobKeeper-related applications to the front of the queue and work with the ATO to accelerate the finance assessment process.

Alternative test

The Commissioner has determined alternative tests for fall in turnover for classes of entities where there is not an appropriate relevant comparison period. Circumstances where an alternative test applies:

  • the entity commenced business after the relevant comparison period (the business did not exist in that period)

  • the entity acquired or disposed of part of the business after the relevant comparison period (the business is not the same business in that period as it is now)

  • the entity undertook a restructure after the relevant comparison period (the business is not the same business in that period as it is now)

  • the entity’s turnover substantially increased by:

  • 50% or more in the 12 months immediately before the applicable turnover test period; or

  • 25% or more in the 6 months immediately before the applicable turnover test period, or

  • 12.5% or more in the 3 months immediately before the applicable turnover test period.

  • the entity was affected by drought or other declared natural disaster during the relevant comparison period

  • the entity has a large irregular variance in their turnover for the quarters ending in the 12 months before the applicable turnover test period, excluding entities that have cyclical or regular seasonal variance in their turnover, or

  • the entity is a sole trader or small partnership where sickness, injury or leave have impacted an individual’s ability to work which has affected turnover.

Fair Work Commission response to Australian Government JobKeeper payment scheme

The Fair Work Commission have already implemented processes to apply to the Commission to deal with a JobKeeper dispute. They have power to deal with these by mediation or conciliation, making a recommendation or expressing an opinion, or arbitration. Areas we can expect to see disputes arise are in relation to:

  • temporary and partial stand downs

  • temporary changes to an employee’s usual duties and locations of work

  • agreements about altering an employee's days and times of work

  • agreements about use of annual leave

  • employee requests for secondary employment and training.

At this time, it is important to remember that the way you manage your workforce must be compliant with the Fair Work Act (2009), and it is important now more than ever to ensure you are following proper processes.

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