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As employers, what you need to know for 2016

As employers, what you need to know for 2016 (Last Updated On: August 9, 2016)

Christmas parties, secret Santa’s and holidays may be all over for another year, and no doubt some are still amidst their busiest time of year. With the new year comes changes and regardless of your industry it is important for your business to prepare itself for what is on the horizon.

What do we have to look forward to in 2016?

As we are all well aware, the human resource and employment relations systems are ever changing with new court decisions, government transitions and legislative variations to keep us on our toes. Because of this we need to be somewhat proactive in understanding what changes lay ahead and to assist, we have provided a brief break down of what to look out for as it may impact you, your business and your staff. All Employsure clients will be kept well informed of any major changes to legislation.

Productivity Commission and Penalty Rates

In November 2015, the Productivity Commission put a report together reviewing how the current workplace relations system fairs with Australia’s economy and labour market. Specifically, the report has drawn the attention of a lot of businesses due to a potential reduction of weekend and public holiday penalty rates within the hospitality and retail industries. The focus behind this reduction is to assist in lightening the financial constraints on small business, with the aim to boost employment and consumer choice.

In summary the workplace relations framework report has:

– recommended that penalty rates on Sundays in hospitality, entertainment, retail,        restaurants and cafes be the same as on Saturdays

– pushed for a new statutory ‘enterprise contract’ between small business and              workers to introduce more flexible working arrangements

Building from the 2015 introduction of Malcolm Turnbull in September, the Commission aims to finalise the report through political and public opinion at the Federal election in November 2016. As the report poses a potential change to the workplace relations system, it is important for small businesses to stay alert, as new penalty and working arrangements may be introduced. Again, Employsure clients will be kept fully aware of any changes made.

Federal Budget

The Federal Budget is set to be released in September 2016. Reflecting on the 2015-2016 financial year, the Federal Budget provides employers with a scope of financial resources allocated to a particular industry sector or business venture. The government also allocated a $5.5million small business package in order to reduce red tape, while offering generous tax concessions to encourage small business owners to create jobs.

However, with the economy in a constant flux it is important for small businesses to be aware of any preceding alterations to this red tape reduction through the allocation of funds, such as Fringe Benefits Tax (FBT) and Capital Gains Tax rollovers, which may vary this year.

More importantly, a major factor of the Federal Budget for the 2015-2016 financial year are the implied changes to the Paid Parental Leave Scheme. That is, for children born or adopted on or after 1 July 2016, Parental Leave Pay entitlements paid under the Commonwealth Paid Parental Leave scheme will be reduced (from $75,000 to $50,000 over a 26 week period) where a claimant is also entitled to employer provided Primary Carer Pay (paid maternity leave).

This means that depending on the income of your employees, the entitlement paid through the Department of Human Services may be subject to change, as such could be a sticking point for employers as the budget will be pushing for an increase in employer paid parental leave schemes to be adopted.

Minimum Wage Increase

Australia’s minimum weekly wage forecasts are projecting a trend for the minimum wage to increase to between $5.00 and $8.00 for full-time equivalent employees by 1 July 2016. Following last year’s 2.5% increase, this will meet the consistently rising standard costs of living.

For those of you paying salaried or fixed rate arrangements, this will require a review of how you buffer your staff wages against their working arrangements and the minimum entitlements. For those of you paying the Award minimum, it is important to ensure you are remunerating no less than the updated minimum when the time comes.

Superannuation

In lieu of the minimum wages and Federal Budget, a lot of conversations have been centred on the Superannuation Guarantee (SG) and its potential increases in the next five years. Currently at 9.5% the SG rate will remain the same for another 6 years, increasing to 10% from July 2021. At this stage, your current contributions to your employees’ superannuation will not need to change for 2016.

Federal Election

Further to the Budget and Commission report, the Federal Election has been proposed for November 2016, depending on the preliminary polls which will be called upon in February. What this means is that the current ambitions of the Coalition government may change where a Labour majority vote takes precedence, with resource and funding allocations, and legislative reform to be a potential focus.

Summary

From a top level perspective there are several points of consideration to look out for in 2016 to ensure your staff remuneration is kept up to date, your business is across the resources and funding as dictated by the federal budget and you ensure your staff are informed of wage and penalty changes that may affect how the employment relationship is managed.

There is still variability as to the specifics of what 2016 will bring, but to ease any stress or concern we will keep you informed of any crucial changes that may affect your business in the new year.

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