Australia: JobKeeper Update: What employers need to know

In Brief

The Morrison Government recently extended the JobKeeper scheme to 28 March 2021 and has made changes to the eligibility requirements and payment rates. Businesses should review their eligibility now to ensure they are eligible for the extended scheme.

Overview of JobKeeper changes

On the 21 July 2020, the Morrison Government announced key changes to the JobKeeper scheme. It is important to note that these changes will not come into force until 28 September 2020.

In brief, these changes include:

• An extension of the program to 28 March 2021. The scheme was due to finish on 27 September 2020;
• Turnover tests to determine eligibility (see details below);
• Tiered payments for eligible staff (see table below); and
• Reduced payments for the extended scheme and differing rates for those who work more than 20 hours per fortnight and those who work less than 20 hours per fortnight (see table below).

Treasurer Josh Frydenberg acknowledged that Australia's economic recovery was only in its early stages, and a number of businesses and individuals remain significantly affected by the pandemic. Due to the pandemic, the Morrison Government forecasts a record low wage growth of 1.25% in 2020-21. The extension of the JobKeeper scheme intends to recognise this recovery.

The JobKeeper extension is expected to cost the economy an additional $16.6 billion.

New Turnover Tests

After 28 September 2020, once the extended scheme comes into play, organisations will be required to reassess their eligibility by reference to their actual June and September quarter turnovers to demonstrate that they have suffered an ongoing significant decline in turnover. If organisations cannot demonstrate a decline in turnover in both quarters, they will not be eligible for the December quarter.

Organisations will then need to reassess their eligibility again to determine their eligibility for the March quarter. To be eligible for the March quarter, organisations will need to demonstrate their turnover has declined in each of the previous three quarters (June, September and December 2020).

JobKeeper Payment rates for extended scheme

The Government announced a tiered scheme for the extended scheme, with lower rates of pay for workers working more than 20 hours per fortnight (full time rate) and those who work less than 20 hours per fortnight.

This is a change from the previous 'flat rate' for all eligible workers and has been welcomed by employers who were finding that some employees were earning more under JobKeeper than prior to the reforms.

The Government has provided the below table to show the changes to the scheme:

Summary of Fair Work Commission orders

Employers should be aware that the provisions regarding JobKeeper under the Fair Work Act 2009 (Cth) (FW Act) are likely to continue to apply to the extended scheme.

In brief, the FW Act has been amended to allow employers who qualify for the JobKeeper scheme to, among other things:

• Require employees to stand down (not work) on days they usually would, for a lesser period or for a reduced number of hours, if they cannot be usefully employed (see section 789GDC);
• Direct employees to perform other duties within their skill and competency (see section 789GE), or perform work at a different place (see section 789GF); and
• Request an employee to take annual leave unless their balance would fall below two weeks (see section 789GJ).

These directions are subject to conditions, including that they must be reasonable requests and consultation with the employee must occur before the direction is undertaken.

Employers should seek advice before implementing any of the above actions to ensure they are acting in compliance with the conditions under the FW Act.

What should employers do?

Employers that are currently eligible for the JobSeeker scheme should seek advice on the new eligibility requirements to determine whether they will be eligible for the extended scheme.

Employers that were not eligible for the JobSeeker scheme are encouraged to re-apply under the extended scheme, as circumstances may have changed or now fit the requirements. Check if you are eligible at Enrol for JobKeeper.

Colin Biggers & Paisley have a national employment and safety team that can provide accurate and timely advice to employers as this matter evolves.

If you would like assistance managing your return to the workplace, or you would like to read more about Colin Biggers & Paisley's national employment and safety team, click here.

HR Highlights

We will be looking at these reforms further in our upcoming HR Highlights Presentation on 28 July 2020. Megan Bowe and Andrew Buritica Toro, from our national employment and safety team, will be discussing the topic of Remuneration. To register, click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.