Facebook Live Event 14: Is Job Keeper Going To Be Right For Your Business?

Published April 07, 2020 Views: 4

7/4/20

With the new job keeper wage subsidy likely to pass through Parliament tomorrow, Ed outlines what you can expect as a business owner.

To help your business navigate the COVID-19 crisis Employsure’s founder and Managing Director Ed Mallett is hosting live events on Facebook, to discuss the latest events, burning questions Employsure’s clients are asking and to offer business and management tips. At the end of every session, Ed will answer a few questions that come through the comment section.

Facebook Live Event 14: Is Job Keeper Going To Be Right For Your Business?

  • Transcript

    Ed: Ed here. Just checking in with the daily midday catch-up on all things workplace relations and COVID-19. I hopefully got some additional watchers today viewing as a result of a shout-out that we currently had on “The Today Show” this morning, which is fantastic, hopefully broadens our audience to continue in our mission to help small businesses through these trying times.

    So welcome to those who are joining us. What we’re going to do today is focus very much on job keeper. We’re all on the edge of our seats waiting for job keeper, which looks like it’s gonna get passed through Parliament tomorrow. A few updates overnight and a few interesting other angles for us to consider before we turn to the standard set of questions today, which we’ll spend a long time answering today. So I know a lot of you are, like I say, on the edge of your seats waiting for the news about job keeper.

    So a bit of a hotchpotch of information about job keeper that seems to be cropping up overnight, I mentioned yesterday, but just to confirm, the government at this stage is holding firm on the idea that casuals with less than 12 months of regular and systematic engagement by employers look like they’re not going to be included. There was a push by the ACTU to get them included, but that doesn’t seem to have been something the government has been willing to step back from. So the likelihood is that casuals of less than 12 months’ service won’t be included in job keeper.

    There are a couple of updated fact sheets on the Treasury website, which we’ll put the links to today on this Facebook page so you can have a look at them. And those fact sheets disclose a bit more information, a few more hints, I suppose, as to what we can expect tomorrow.

    The position that we’ve been taking on here that this is a subsidy that’s gonna be paid in arrears through the ATO looks to be confirmed. That’s certainly what the fact sheets are saying expressly now, it being stated on there that for those paying their BAS quarterly, the first sign of the subsidy, assuming it passes tomorrow, will be seen in their return in May. Just a reiteration on that point that in May you would only be getting paid back for any eligible payments that you have made in March.

    So this new quarter that we’re in as of right now, and any employees that you started paying on the belief that you’re gonna get job keeper today or tomorrow as when we know what’s exactly happening with it, you’re not gonna get the money back for those employees until sometime around August, maybe even September. So there is that cash flow pinch that we need to really be aware of and we spoke about yesterday.

    So a couple of other bits of information coming through. It looks like there’s gonna be a pretty wide gate on this 30% reduction turnover piece, which is good news, I think. It looks like a very pragmatic approach, which is what we’ve been calling for, that’s gonna be taken by the government. They have said that they want to go with a 30% turnover rule, which [inaudible 00:03:28] through your BAS activity as submitted.

    However, they’re going to look at that pragmatically. And for those employers with different circumstances, a number of whom we’ve spoken to through this channel, so maybe you’re a startup that wasn’t around in March last year or you had a particularly good March last year or weak March…sorry, last year, and this year has been relatively strong, and comparatively, and you’re worried you might miss out, all of those things will be able to be considered by the tax commissioner, and you’ll be able to make an application, it looks like, in order to get dispensation in those channels.

    I think what the government seems to be saying is that what they wanted to do is set up a pragmatic solution for businesses to achieve its purpose here, which is to reduce the amount of people they put out of work. They’re also, at the same time, been looking for abuses of the process on what you might have seen in the international news, for example is in the U.K. where they have a subsidy going through that they’re calling furlough over there. You’re seeing pretty wealthy organizations like Premiership soccer clubs have been furloughing their staff. And this is starting to be a bit of a narrative with people resisting this idea that well-catalyzed organisations with strong balance sheets shouldn’t be relying on the taxpayers to fund their employees.

    I suspect there’ll be a similar sentiment that grows here. And what the government will be on the lookout for is businesses that is trying to support their balance sheet rather than necessarily because they need it to actually carry on employing those employees. So there will be a relatively broad test, but they’ll be looking for abuse of that.

    And on the question of abuse, that’s a drum that the ACTU have been banging. A slight digression from me on this. It always slightly irritates me to see that that drum is heard so loudly. Ultimately, only about 15% of the private workforce is unionized, so that was very loud voice that looked like it was gonna be a stick in the spokes for a while. But it seems a more pragmatic approach has been taken by the ACTU over the last 24 hours. And they seem to be saying that they’re not going to be agitating to prevent this going through Parliament tomorrow.

    They say that they’re disappointed about that casual position, but generally speaking, they’re going to look to get this done in collaboration with the government so that we can move forward, which is pleasing news, because frankly business is desperate for this, as we all know. We’re desperate for clarity as much as anything, some pace rather than a load of politicking and grandstanding about what should and shouldn’t be done. We just need some pragmatic action taken quickly so that we can all get on with communicating clearly with our staff, helping them and in turn helping our businesses. So the good news is that looks likely to happen tomorrow.

    One other item in that hotchpotch of information was there was some confusion yesterday not-for-profits and what their position would be. We’ve been asked a few questions by not-for-profit clients of ours. A shout-out to Sydney Dogs and Cats Home, who I’ve mentioned on here before that I’ve seen that they’ve been watching and were asking yesterday about a not-for-profit.

    So there’s a lower standard in terms of access to this for not-for-profits. It’s 15% of turnover. There needs to be a reduction in 15% of turnover in a comparable period. And you need to be registered with the Australian Charities and Not-for-profits Commission.

    Now that what is turnover, I think, was the question I saw asked yesterday. So that will include contributions or funding grants and so forth, any funding coming through to the organization over equivalent periods. So if it can be shown that there’s a 15% downturn there, again, I suspect with the pragmatism that the government is suggesting that they’ll show to different situations, but it’s a 15% bar.

    The confusion yesterday came in particularly for non-government schools. There was some confusion as to whether they would receive access to this lower bar of 15%. The treasurer came out yesterday afternoon and said no. In fact, they’re gonna have to operate like private organisations to the higher 30% bar, which caused some consternation between them and universities that might need clearing up in the legislation, I think. So watch this space if you happen to be a non-government school, and you’ll be watching the news on this very carefully, I’d say.

    So that’s the hotchpotch of updates around job keeper. One extra thing that I just wanted to put on your radar that’s been sort of, I suppose, worrying me in the last 24 hours or more is that job keeper, as it is being set up, and a number of other protective measures are being promoted, all point towards protecting primarily Australian citizens and permanent residents. And there’s a growing narrative in the media, and I’ve certainly seen this coming through from the questions from you guys, is what do I do if I have a Visa holder. They are on X, Y, or Z Visa. Classic ones would be working holiday Visas, maybe people are sponsored on 457 as well, what about them?

    Typically, those people have not got access to job seeker and other related benefits. It also seems that you’re not gonna be able to get support for them through job keeper, which means that they’re left somewhat in limbo. Now, in essence, what that seems to suggest is that the government is placing you in a position where if you want to carry on employing someone who falls in that category of worker, you’re gonna be doing it without the subsidy from the government, and you also know that if you didn’t carry on employing them or you stood them down or agreed and paid leave that they wouldn’t get the financial benefits of support through Centrelink.

    So there’s a lot of confusion and muddle going around that. I saw a couple of organizations have asked the government to address this through the legislation tomorrow. My suspicion is that they won’t, that they’ll stick with the ruling that this is for all Australian citizens of permanent residents, and they won’t go further than that.

    The problem that arises is that you are consequently sort of disincentivized from looking after those people in your workplace. So if you lined up all of your employees, let’s say you had 10 employees, and 9 of them were people that you could get a job keeper support for, but the 10th person was, let’s say, upon like myself and was…I have to be a permanent resident, but let’s say that person was here on sponsorship or a 457, so, you know what, I can’t carry on paying that person because I don’t get subsidy and therefore going to move them onto unpaid leave, maybe even look at making them redundant, otherwise dismissing them.

    There is a risk, and I think it’s a real risk, on what’s always said and done on this that you end up then with discrimination claims relating to that. There is a real risk that you end up financially disincentivized from keeping those people, thinking that that is somehow okay because the government is saying, “It’s okay to turf them out but to subsidize other people,” and confusing that message with a belief that that overrides any obligations that you have not to discriminate against your staff on the grounds of their race and nationality. So be very very careful of that.

    I am seeing some questions pop up and saying, “What about this person? What about that person?” I’ve already previously flagged as well, for those of you that are sponsoring people, if your employment with those people were to end, and you felt, for example, you can’t carry on employing them because you’re not getting support and subsidy for it, there is a chance and a likelihood, if your employment ended, that you would be responsible for repatriating them, including cost of flying them home, which may be a cost that could be a pretty significant in current climate. So be very careful of that being an issue arising inadvertently in the workplace.

    So I might sound like I’m doing my bit for [inaudible 00:12:12] in Australia here, but I’m really saying this on behalf of business owners. Just be very careful that you’re not inadvertently being drawn into actions which could consequently be said to be discrimination against workers.

    So that’s a bit of an update from me, all focused on job keeper. Let’s get cracking on some questions so that we can work through the massive questions that have been over the last 24 hours and are starting to flow through now.

    Stu: Let’s kick off with this from Graham, a self-described enthusiastic Employsure client with a bit of a pivot story.

    Ed: Great.

    Stu: We are a non-metropolitan not-for-profit music educational organization now delivering lessons 100% online. To now start servicing some of our otherwise regular group activities, can we assemble, let’s say, three to four staff members in our empty usual venue strictly observing social distancing rules to livestream?

    Ed: Good question. So a not-for-profit organization, a client of ours, thank you very much, guys. And the question is, can they start to assemble staff of theirs who are in the business of providing musical instruction, it sounds like, or musical coaching, to people to livestream through to clients of theirs?

    I don’t see why not. There is a ban on performing arts in public as such, but there’s nothing to say they can’t congregate in workplaces. Again, I’ve said it before, and I’ve said just about every day, I’m sitting here with a group of people in our workplace. I’m in my office at work because I believe that I can only reasonably do my role from here. And in that case, you need to congregate your staff in one place subject to social distancing in order that you can livestream to people.

    I’ve been asked similar questions by Jim’s Yoga Studios, people like that. Yes, your people can go into livestream subject to social distancing principles. Different rules in New Zealand, just make it clear, where workplaces have been shut down save for essential services.

    Stu: From Ashley, a two-part question. If we have 20 people eligible for job keeper but can only afford to pay 10 of them, can I only pay 10 of them? Is this legal? If so, do I need to inform those I am unable to pay of this decision?

    Ed: So Ashley asks a really good question. Twenty people, they’re all eligible for job keeper, but even with job keeper, there is only a way of paying for 10 of them. Is that okay? And the answer is yes. Job keeper is not a requirement. You’re not forced to use job keeper. What you should be doing is going back to that staging process I’ve recommended, stage one, crisis management, looking at the challenges you’re facing day to day.

    Stage two, which is what this question is really about, is planning, sitting down and planning out what your cash preservation requirements are over the coming months. Prepare for the worst, hope for the best. And in a circumstance where you need to preserve X amount of cash, and in order to do that, you can’t carry on paying all 20 staff even with benefit of the subsidy, you can make choices with relation to the 10 staff that you can’t pay. And those choices are the same ones that we’ve discussed before.

    So first and foremost, I’d be discussing variations to their hours and/or pay. Second to that, you might be considering things like agreed unpaid leave. And then, finally, if you get to this stage, looking at things like redundancies, I say, finally, because of the cost of redundancy, which may well be in excess of the short-term cash flow, cutting requirements that you have.

    Stu: From Deanna in Townsville. We were in the middle of the monsoon in February, March 2019. How do we compare revenue when the business was closed?

    Ed: Hi, Deanna. I saw I think a similar question maybe from yesterday on this. Business was closed in Townsville last March, and what do we do because our revenue would understandably be lower then than it is now? That to me would be a classic case that you’d be picking up the phone, emailing the ATO on and explaining your position relative to your past statement. And I would be amazed when it comes to it that they’re not taking an empathetic and sympathetic, pragmatic view to that and taking into account that your
    Business needs are slightly different from the cookie-cutter approach that they suggested.

    Stu: From Shannon. My business has recently changed a full-time employee to a casual. They’ve been with us for longer than 12 months as a full-time employee, but the change to casual has only been recently. Does this mean that they would be ineligible for job keeper even though they are a long-serving employee?

    Ed: So this is a full-time employee who’s changed to a casual and only recently happened, therefore hasn’t been a casual for 12 months, but they have overall been with the business for 12 months. I would find it very surprising if they didn’t categorize as being eligible for job keeper given their connection to the business. And really that’s what the government seems to be looking out, for people that have got regular and systematic connection to the business. Having previously been full-time, they should qualify.

    Stu: From Glenda, a client, Hunter Commercial Painter. Just to clarify, with the job keeper payment, if we pay the $1,500 per fortnight, and top up the rest of pay for that period, is super to be paid as well? Second part of the question, also, if they are full-time, would they accumulate holiday and super pay on those payments?

    Ed: So Glenda at Hunter Commercial Painting is a client of ours. Great to hear from you, Glenda. She’s saying, if I top-up, pay to the $1,500 per fortnight, first of all,
    Is super payable on that? So assuming that you have to pay over and above whatever the standard wage is to get to the $1,500, the government says that you don’t have to pay super on the top-up. It’s not considered wages per se for the superannuation guarantee. And the second question as part of that was, too, was?

    Stu: Also, if they are full-time, would they accumulate holidays and sick pay on those payments?

    Ed: If they’re full-time, do they accumulate holidays in sick pay on those payments? That same question really for their part-time as well. So they would accumulate purely on the basis of the hours that they are working rather than on the top-ups. So we’ve been asked a bit about whether people can do increased hours in order to essentially earn the top-up, and the answer to that is yes if they agree to do it, but if you’re just topping people up in accordance with what looks like it’s gonna be the job keeper requirement, they’re not actually working for that top-up. That aspect of the top-up is not wages. There’s no superannuation guarantee, and it doesn’t accrue benefits. Look at their hours rather than what they earn in that regard.

    Stu: From Madeline. Our business looks to be eligible for job keeper. We have some staff who plan to get some casual work with another employer while on job keeper. Is this allowed?

    Ed: So casual staff working for other people whilst on job keeper, yes, that’s certainly allowed. Now the more fundamental question will be whether that compromises your ability to claim job keeper against those staff. This is going to be a really interesting thing tomorrow.

    I think probably the thing I’m most interested is how on earth they’re gonna work out which employer gets the benefit of job keeper. So you can almost imagine scraps between employers saying, “Well, I use this person for 10 hours.” And “I use them for 10 hours. Why should you get $1,500 bucks for them and I don’t?” And there will be real tensions there between employers, and they’re gonna have to expressly address how those tensions are going to be resolved and how they’re gonna work out who is deemed to be the employer that gets the benefit and who doesn’t.

    So remember, if you’ve got two people doing 10 hours, and let’s say you’re paying each of using round numbers, $25 an hour $250 a week, you’re gonna get paid back via job keeper to cover what that person, if you’re getting the benefit. But if you’re not that $250 bucks a week, it’s gonna go out of your pocket, and you’re not gonna get any subsidy to support you just because you’re deemed to be the secondary employer.

    So I’m really interested to see how this works, because of course not everyone knows where people work other than their own workplace. I certainly don’t know for sure whether there are people here that moonlight in other roles are perfectly entitled to if that doesn’t compromise any of their obligations here. So they may well be working for other people that think they’re gonna get job keeper for them.

    Stu: From Fiona. We have unfortunately had to make a team member redundant. They will now go on to job seeker. Will we be able to change them over if we qualify for job keeper?

    Ed: It’s a great question from Fiona. She asks about reemploying someone who’s been made redundant. Can you put them back on and then claim job keeper? It looks like you can from the latest updates to the fact sheet. There’s a suggestion there that if you reengage someone, then you can look to put them on job keeper. There’ll be some nuance around this question on the first of March. So did he make them redundant after the first of March? Were they employed on the first of March and then you bring them back now? In that case, it looks likely, but that’s a sort of gritty bit of detail that will need to be clarified tomorrow.

    Stu: Sharon asks, does a job keeper mean I need to start paying fortnightly pay rather than monthly?

    Ed: Another great question, this is Sharon asking, whether she needs to move to fortnightly pay. No is the answer. I have no idea why they’ve expressed this as a fortnightly subsidy. I guess it was around a number it sounded better to say $1,500 a fortnight. You don’t need to pay in accordance with that frequency because ultimately you’re gonna get paid back from the ATO in arrears for however many fortnights are in the BAS period that you submit for.

    Stu: A question from Judy that we’ve touched on yesterday, but it’s worth repeating. So if we start paying job keeper once it’s passed through tomorrow, how are we supposed to pay staff if we have reduced cash flow and not get it back until the August, September BAS statement?

    Ed: Great question. Did you say it was Judy? Asked what about the cash flow if I’m only gonna get paid back from the government? I don’t wanna be the sort of “poo-poo” job keeper, like it’s a really good thing that we’re all hanging out for and holding out hope for. But beware. The first sign you’re gonna see of any money back from the government on this is now in May unless you’re a company that does monthly BAS. But assuming you’re on quarterly BAS, you’re not gonna see until May, and that is only for March. So that’s the stuff that’s already happened. You happened to have paid people during March. You hadn’t stood them down or otherwise agreed leave with no pay. You actually physically paid them in March. You’re gonna get something back in.

    For the stuff that we’re talking about today, you’re not gonna see that until August, September. So there is a cash flow bridge. That’s the reality, that for three plus months, you’re going to be left bridging that cash flow. And if you’ve got reduced cash flow, and you haven’t got a lot of cash reserves, as is the case with most businesses, what are you gonna do about it? Prime Minister Morrison’s position is go and speak to your bank. I’ve questioned how sensible that is. Yeah, I see job keeper is something that’s a really good idea for a certain type of business. You’re still operating, and you need people to do the work, and you’re getting the benefit of a subsidy to support your business through that time.

    I don’t think it suits very well those that have people that have always been stood down or otherwise agreed unpaid leave, because they’ve been shut down, for example, because in that case all you’re doing is acting as a cash flow bridge between the government and your employees. And rushing out and getting loans for that doesn’t seem prudent to me.

    With that said, I have seen, and I asked a question yesterday of you guys, and I’ve seen some comments overnight where you’ve said, very kind-heartedly, I should add, that you’d want to support your employees, and you would take on the burden of debt to do that. So good on you for having that attitude. I just urge you to remind yourself that we all wear three hats as business owners. The first hat, and this is no particular order, is our family hat, looking after our family. Our second hat is our hats as business owners and our obligations to the business, including its shareholders, which may well be you as well. And then the third hat is to your employees.

    Now those hats ideally all match up with each other, but they don’t always. So be careful in this. I think the government would urge us to have the right social sensibilities and conscience about this, but rushing out and ladening your business with debt, it may not be the right thing to do even if it’s just acting as a bridge to get cash to your employees. They can always go and see job seeker, which might not be quite so financially official, but it is there. You’re not there in my view to bridge the gap between the government and your employees.

    Stu: From Chris. Does job keeper impact the method of redundancies based on a downturn in business?

    Ed: Does job keeper impact the method of redundancies based on a downturn in business? It does in the sense that in any redundancy situation, Chris, you should be consulting with your employees, and you should be considering all reasonable alternatives to making them redundant. And one of them might be now that you might have a downturn at work that could be temporal. And in that case, you might be supported by the job keeper subsidy to keep them on to see whether that downturn and work is longer-term or we might bounce back. We hopefully will bounce back in the short term. So, yes, it does. It changes the process slightly, and then you do need to consult and consider this.

    I think there’s a risk if you rush to redundancy. Whilst job keeper isn’t an obligation, if you fail to consider job keeper as a suitable alternative, that might count against you in any, say, unfair dismissal playing in the future.

    Stu: From Kevin. If a casual employee, or any staff member for that matter, qualifies for the job keeper, then turns around when we open back up and says they don’t want to continue in their job, are they required to repay the money?

    Ed: So question is to whether an employee that gets…is the beneficiary, I suppose, of job keeper, and then they leave you at the end of all of this, are they required to pay the money? No because you’re not out of pocket. The only person that’s arguably out of pocket in that is the government that you have paid the employee, you’ve been paid back from that employee. The whole idea was that you carry on employing the employee in the future, but the employee has decided they don’t want that to happen. You’re not out of pocket at all. You’ve been covered for that employee. The only person with, I suppose, the employee might, in principle, have the prime-minister rapping on his door asking for the money back, but I suspect that’s not gonna happen.

    Stu: From Linda, a client. Will Employsure be able to provide any documentation that we can use to have a discussion with our staff if job keeper is not something that we can offer at this time? The media is continuing to tell people that it’s happening now, and we have staff calling expecting this tomorrow.

    Ed: Great question, Linda. And, you know what I’m gonna do, I’m gonna go out and speak to Lou, who manages our services team here, just make sure that we’ve got the right documentation in place. We will have that for you in response to the legislation tomorrow. I know that her and her team are poised ready to see what the legislation says so that they can minus or amendments, but we’ll make sure that our clients have got all of that documentation available to cover the range of circumstances that flow from tomorrow.

    Stu: Mark asks, we are a manufacturing company with 10 employees. We are currently still trading. Our cash flow is starting to reduce and workers slowing. We have four employees qualifying for long service leave. Do our employees have to exhaust all unpaid leave, annual leave, and long service leave prior to qualifying the job keeper?

    Ed: Okay. Do employees have to exhaust any accrued entitlements prior to applying for job keeper? The answer’s no. There was a really interesting article I read this morning about Jetstar pilots being steaming about the fact that Qantas, their own Jetstar, is apparently going to seek to use job keeper to pay off the entitlements. So they are currently utilizing, one of them being on unpaid leave, and there’s this whole debate about is that fair because, ultimately, job keeper shouldn’t be to cover off what is essentially a debt that the employer already has. You owe your employees for accrued leave. You shouldn’t be able to use job keeper to offset. That debt is the argument that was made this morning.

    I’m shooting off on a bit of a tangent here, but I suppose just saying that it is quite a complex area, but if someone has gone on what is, in principle, unpaid leave, there is no requirement for them to run down their entitlements before you get to job keeper. There seemed to be two possibilities if someone is on that unpaid leave. One, you can pay them $1,500 a fortnight as sort of non-wages to be sitting out on an otherwise unpaid leave, and you will recoup that later from the government. So that’s where I say I’m not sure job keeper does work very well, because you’re being asked to be the cash flow bridge between the government and the employee.

    The second option is that the employee does choose to take those entitlements, but that subject what the legislation says tomorrow, you get paid back or recredited for paying out some of those entitlements. That seems to be a bit of a discussion point that may well be addressed tomorrow. But short answer…big, long, woefully answer, but the short answer is no, employees don’t have to do this, don’t have to draw down on their entitlements before they can become eligible for job keeper.

    Stu: From Delia. Is the 30 percent reduction internal are based on invoice or receipted revenue, or does this depend on if you are cash or accrual for BAS recording?

    Ed: Really good question from Delia, maybe above my paygrade in terms of different accounting standards and so forth. But the broad question is I’m gonna read it as what happens if you’re paying BAS on a cash basis versus an accrual basis. So the answer is, as I understand it, the 30% is gonna be evaluated under what your BAS return says so, whichever methodology you’re using in the…the BAS return will be the one that is relied upon.

    But in a case for example where you’re doing on an invoice basis rather than a cash basis, I suspect those are exactly the sort of things the ATO would take into account if you said, “Hang on a second, that doesn’t fairly represent what my bad debt situation might be.” That’s a growing concern for me.

    I’ve mentioned before that for Employsure, for example, we work on a subscription with our clients, and one of the things we’ll be discussing with the ATO will be, hey, we don’t currently yet know what the problems are for our clients in terms of their financial circumstances and what impact that could consequently have on us. We’ll only feel that effect after they have felt it, therefore, please, can we speak pragmatically with you about our situation even if our BAS doesn’t yet reflect the 30%. So we’ll be having those sorts of conversations and would recommend anyone else in a slightly different situation to be having those conversations as well.

    Stu: A variation on a theme from Alisha. We have a few part-time staff that work under 10 hours per week. Will they be entitled to receive the full $1,500 fortnight payment?

    Ed: So a part-time staff working 10 hours a week, earning less than $1,500 a fortnight, will they get topped up? And the answer is yes. If you want to claim job keeper back, you don’t have to top them up, but you won’t get job keeper for them unless you do. So you’ll need to top them up to $1,500. That’s the current position on it. Let’s see if that changes significantly tomorrow, because it does seem like there’s a bit of a disincentive to top those people up. You’re again being asked to fund the cash flow bridge between the government and the employee there. But that’s the way it’s stated to be at the moment.

    Stu: From Connie, a client. Ray Hadley just announced on 2GB that job keeper is being applied for by the employer and then paid directly to the employee, not the employer. This is not how I understand it. Am I wrong?

    Ed: I don’t know that you’re wrong. It sounds like Ray is wrong. If you heard it here first, maybe I’m wrong. We’ve gotta wait until tomorrow is the short answer, Connie, but my understanding a bit, taken from the factory that we’ll put up on the website here from the Treasury, and it says expressly on there, and I quote the words, “The payments will be in arrears from the ATO.” Now the relationship with the ATO is between the company and ATO, not the employee.

    They obviously have a separate a relationship with the ATO. My understanding is we will be getting it back as employers in arrears because we’re already have paid it. And Prime Minister Morrison, as I say, has already said, “If you’re worried about funding this, go and speak to your bank.” He doesn’t seem to have any doubt that this is gonna be a process of paying staff and subsequently claiming it back to the employer from the ATO, not to the employee.

    Stu: From Neighbors Aid. Our employees are currently paid weekly. How will a fortnightly payment affect that?

    Ed: Neighbors Aid, fortnightly payment doesn’t change…you don’t need to change the fact that your employees are paid weekly. Carry on paying them weekly. It will be reflected in your BAS return, and that’s the basis upon which the ATO will calculate it.

    Stu: From Alison. If I want to bring a staff member back, and they choose not to and would prefer to stay home on job keeper, where do I stand here?

    Ed: So Alison asked here, if you want to bring a staff member back, but they don’t want to, they wanna stay at home just on job keeper. It’s an interesting one, because someone, for various reasons, may say no, I just want to stay at home. Well, the reality is that if they don’t come back, you’re under no obligation to pay them the $1,500 and then subsequently claim it.

    So what you’d be saying in that circumstance is, look, I have worked for you. I need you to come in and do it. We’re practicing social distancing. There’s no other reason to not be at work. If you don’t come to work, you’re currently on unpaid leave. I’m not in a position to fund the $1,500 bucks and subsequently claim it back so you’re just gonna carry on unpaid leave. But if you wanna earn an income, which I may well be able to claim some of it back through job keeper, then you need to come into work.

    Stu: A general question from Greg. Can an employer force staff to take annual leave?

    Ed: Can an employer force staff to take annual leave? The answer to that is, if you haven’t had a stoppage of work and therefore able to do a stand down under the Fair Work Act, you can’t force someone to take annual leave. You need to agree it with them. So you need to actually sit down with those staff members and ask them to take in your leave.

    Stu: From Kelly, a longtime Employsure client. If I have a service company that employs my employees and invoices my trading company every fortnight to pay wages, how do I prove a 30% downturn in my service company that pays wages when it doesn’t trade? I can prove a 30% downturn in my trading company, but it does not employ staff.

    Ed: So there’s an accounting setup that I’m sure a lot of you follow. I remember when we set up Employsure, my accounts, we’ve recommended we did this as well where you have a trading entity, and then you have an employing entity. Ultimately, they were all owned as part of the same group typically. And in the position of the government on this, they’ve come out and said it through those fact sheets available on Treasury website said that groups will be considered as a whole whether or not employees work for one subsidiary or maybe they work from a number of different companies within the same group that we considered as a whole is the position. So it doesn’t look like that will create a problem that you can show downturn in the trading entity and the employing entity doesn’t have it.

    Stu: From Sebastian. For employee who usually earn more than $1,500 a fortnight, are we able to cap the hours of an employee up to the $1,500 per fortnight during the downturn?

    Ed: Sorry, can say that one? I just got distracted to seeing one of the questions come through. I’ll come back to the one. Please say it again.

    Stu: Sure. From Sebastian. For employees who usually earn more than $1,500 per fortnight, are we able to cap the hours of an employee up to the $1,500 per fortnight during the downturn?

    Ed: So it’s a really interesting question. This seems to be what the ACTU been most worried about, which is that people say, “I still want you to do the same hours. You used to be earning more than $1,500. The government is now paying me $1,500 now for you, and that’s all what I’m gonna give you. And the ACTU was saying, we don’t want employees, vulnerable employees particularly, to be abused by that so that they’re forced to do the same hours at less pay below the minimum wage.

    Now I have not read anything that suggests that that is possible or even a legitimate way of doing this. The fundamental principle remains that minimum wage still applies. There is no…This is why I felt like the ACTU was kind of over complicating it, causing the process to derail a bit. I don’t think anyone is saying that underpayment of wages is sanctioned at this stage.

    If you could pay someone $1,500 an hour for the work that they were doing, and it was still above minimum wage, then you can seek to mutually vary subject what the award says that’s relevant to that employee. You can see to mutually vary the agreement for their wages down to that $1,500, but you couldn’t do it unilaterally. So you’d need to sit down with the employee and speak about that. What you definitely can’t do is pay them under the minimum wage just because that’s all the government is giving you.

    Stu: From Maria. We’re closed at the moment, but we’ll be looking at reopening soon if we have staff entitled to the job keeper allowance. Can they legitimately refuse to come back to work?

    Ed: First thing on that, Maria. So she’s closed at the moment but looking to reopen if job keeper is applicable to her. I think that’s a great case study of why this is so bloody good for all of us. Great that Maria is gonna be back at work, functioning again, and her part in the economy will start to play through, I’m sure, for all of us, and other businesses like Maria’s.

    So the question is, can the staff refuse to come back as she wants them to come back if she can get job keeper? Similar to the one I answered a few minutes ago, which is they could, in principle, refuse to come back, but you don’t have to pay them $1,500 to not do any work, and so you will be only paying those that do come back and subsequently only claiming job keeper in respect to those people.

    Now I don’t know what you do, Maria, but I can tell you here that for the roles that we still have open we’ve seen a massive swelling the number of job applications that we have, so it may be that you’re able to cover off any staff that don’t want to work with new staff that want to.

    Stu: From Gunther. We are a real estate sales business. Our revenues are three to six months delayed because of unconditional and settlements. Therefore, while our sales are down, our revenues won’t be affected in three to six months from now. Will the ATO have administrative processes to understand this?

    Ed: So Gunther asked within real estate where settlements on properties mean that their revenues might only decline three months after slow months. Will the ATO recognize this? Yes, they’ll need to have…They’re talking about being pragmatic. It’s again exactly like the situations where, you know, for example, you weren’t trading a year ago, or the person that asked about that in Townsville not trading last March, all of those things will go in the same list of questions that you’ll be able to raise or points that you’ll be able to raise at the ATO, and I anticipate you’ll get a pretty pragmatic response.

    Stu: From Joe. Do we need to qualify each month or just the once?

    Ed: So Joe asks about qualifying once and then what happens after that? To be determined. It looks like this could be an ongoing sort of certification process for it where you’re somehow keeping the ATO updated as to whether you’re still in a 30% downturn or not. And this bounces back to one of the questions I saw popped out, which suggested that the ATO is going to pay this monthly in arrears.

    Now, as I understand it, that’s not the case, that’s not what the fact sheet says, unless you’re paying BAS monthly. So the odd thing about this is because you’re paying BAS quarterly, the ATO, if they only look at BAS for your turnover, will only be able to see every three months whether you still qualify. So presumably, you’d show it for this quarter, and then you’d trade for another three months, and then show it again at the end of that quarter. It’s intended to last for six months at the moment.

    So the real risk, I think, this is what I remain worried about, is that you’re essentially only going to find out formally whether you qualify after you’ve paid three months of wages or job keeper payments. And what I hope isn’t gonna happen is that the ATO isn’t gonna turn around after and say, “We just looked at your BAS statement, and sorry you don’t qualify. Bad luck.” “So hang on a second. I only paid those people on the basis that I thought I would.” And then you’re stuffed having paid down the cash flow on it.

    So I suspect what’s gonna happen is there’s gonna be some sort of pre-authorization to make sure that people actually get on with doing what the government wants them to do, and that’s employing people and paying people.

    Stu: From Megan. On a stand down, my understanding was that all full-time and permanent part-time staff continue to accrue all leave: long service leave, annual leave, and personal leave. If they are now getting job keeper, does this mean they don’t accrue this now like they would have under a stand down situation?

    Ed: So if they stood down, true stand down, that’s correct that you do accrue entitlements on stand down. If they get paid this job keeper, does that mean that they won’t accrue the entitlements. My understanding is that they’ll carry on accruing entitlements, but getting the job keeper as a sort of supplement, if you like, that’s not being paid as wages that you’re then able to claim back on arrears basis, as we say, through the ATO. So I don’t think that that will change the fact that they’re accruing entitlements.

    Stu: From Paul. One casual was engaged on the 26th of March 2019, will they be eligible for job keeper since they’re being employed more than one year but after the 1st of March 2019?

    Ed: So the position that the government has suggested is that you need to have had a year on the first of March 2020. Now I don’t know, to be honest. That’s exactly the sort of case I think that would cause the unions to be frustrated and say, “Hang on, this is someone, because of an arbitrary rule about one year, it looks like they might miss out.” But more importantly, within the context of this, the employer would miss out and therefore might have to make decisions about whether to carry on employing that person. So let’s see what it says tomorrow. But on the face of it, that would suggest that that wouldn’t suffice for the 12 months. At some state, you know, 12 months has got to start somewhere. And my understanding is it’s the first to march 2020.

    Stu: From Jody, a client. Can we make our staff go on holidays? We haven’t got enough work coming in at the moment to fill their day and would rather have them on holidays than being at the business when there is no work. They have been paid their full entitlements, and we are trying to practice social distancing.

    Ed: So Jody asking, can we make her staff go on holidays? And she’s a client. Thank you, Jody. The answer to that is what you should do is seek to agree that with them. That’s pretty generous of you, Jody, to agree to pay them they leave. A lot of businesses are looking at this stage to try and get people to agree unpaid leave. So if you’re gonna pay out their entitlements, then seek to do that with them, and see if they’ll agree to do that.

    There is a world in which, with appropriate notice, we’re well-versed in the concept of shutdown here in Australia at Christmastime, where you give people notice and you essentially ask them to go on leave during that period. So you could, in theory, go a similar principle where you go into a shutdown period. But if you’re not actually shutting down. You’re just seeking to get some people’s go on leave, and you’re gonna pay them for it, then you’d need to agree on that with them on individual basis.

    Stu: Alicia, just looking for some clarity. When is job keeper effective from? Are we required to go back to pay the difference to employees if they did not receive $1,500 per fortnight?

    Ed: Sorry, say that again. Sorry, I’m getting distracted by all these questions going through. I’m not very good at milking multitasking, unfortunately, but sorry, go ahead.

    Stu: Two-part question from Alicia. When is job keeper affected from? And are we required to go back to pay the difference to employees if they did not receive $1,500 a fortnight?

    Ed: So job keeper, when is it effective from? So it’s not in law yet, anticipated to come into law tomorrow or soon thereafter. That will clarify whether it’s retrospective back to the first of March. I suspect it will be. So if you’ve had employees, this is a really good question, actually, if you’ve had employees over the course of March that we’re earning under $1,500 bucks, and you want to claim job keeper for them, do you need to go back and talk them up now? I guess that’s gonna be clarified tomorrow, but if it is, there is a chance that, yes, if you want to claim for them you’ll need to go back and top them to make sure that they’ve got the $1,500 to the last few fortnights.

    Stu: From Ian, an Employsure client. What about employees who are casual that were made permanent part-time in mid-March? Where do we stand there?

    Ed: Employees were casual, made permanent part-time in mid-March. The presumption is, I suppose, that they didn’t have 12 months before that. So the answer to that is that they are unlikely to qualify on the face of it because you’d need to have been part-time permanent on the first of March and/or had 12 months’ casual service at that time. So it looks like they probably won’t. They might be another group that is caught out.

    Stu: From Vanessa. What would happen if you pay your casual employees job keeper, and they are not currently getting any hours however. And then in a few weeks you ask them to come in for a few days, and they say no.

    Ed: Yup, so there’s a growing theme here, isn’t, a worry that people are getting comfy with the idea of self-isolation at home. I suspect what you’ll find, actually, when you ask people to come back into work, they’ll be craving getting back into work. I’m certainly starting to see that sentiment amongst our workforce. Everyone’s trying to get bit fed up working from home. Maybe that’s just what they tell me.

    But this is a question about whether a casual that is getting you’re paying them the $1,500 to not work at the moment. I just say quickly on that without being too tough. Paying a casual job keeper to not do work is pretty unusual, and that’s pretty generous of you. So you’re gonna be paying the $1,500 having subsequently claimed it back. Do you really want to do that in the first place? There’s no obligation to pay a casual staff to not work, and I bet there’s still is some moral obligation that they have job seeker available to them.

    But if you do wanna do it, good on you, very generous of you. But then you say to them, come back in to work, and they say no, you’d be perfectly entitled to say, “Look, I can’t afford to carry on paying you from my cash flow. I don’t have cash reserves. I’m gonna stop paying the $1,500 to you unless you’re coming in and being productive for me.”

    Stu: Interesting one from Liz. One of our tradies took leave without pay as his wife is pregnant, and he didn’t want to risk getting her sick. Now he wants us to claim job keeper for him even though he won’t be working. We want to support him but feel we might not be able to afford it. What would you do?

    Ed: Great question. This sort of sits, again, in the same theme, but there’s some great sort of sentiment and employee, you know, real issues coming out there. Someone has taken leave without pay, pregnant wife, didn’t want to come into work and risk getting sick, totally understandable. Employer kindly offers leave, or agrees to leave without pay. Person now says, “Well, now you can get job keeper. Can you pay me the $1,500 please?”

    The technical answer to that is there is no obligation to pay job keeper, and you’d be perfectly entitled to say, “Look, I can’t afford it unless you’re being productive for me.” And if the person is adamant that they’re still not gonna come into work, then you’re gonna have to take the decision in the case of that person as to whether you’re gonna stretch your cash reserves to do it or not to bridge the gap to the job keeper payment. I suspect you’ll find the answer to that question and how much you wanna retain that person at the end of all this.

    Stu: From Chrissy. If an employee who has been stood down and is eligible for job keeper payment gives temporary employment elsewhere while stood down, how does the job keeper payment work in this particular instance?

    Ed: So the employee is stood down. They go off to work elsewhere to get some income. Well, how does the job keeper work in this instance? Now this, is in principle, you’ll end up with this sort of clashing employer situation where you as the employer may want to claim their $1,500 if you pay it to them, remembering that, given they’re stood down, there is no obligation on you to pay the $1,500. You might say, “Well, you’re actually working elsewhere, you know, they can potentially go and claim it for you instead.”

    So you can have that discussion with the employee, but bear in mind of course that when all is said and done, there may be a risk to that employee ends up heading to whoever the new employer is rather than coming back to you. And that’s one of the things the government is saying is that this is meant to be a retention tool, but you’re not obliged to pay that employee $1,500 just because they are your employee on stand down that otherwise will not be paid, and you can leave them to deal with that within your employer potentially.

    Stu: From Kay. We have a part-time employee who works 67 hours per fortnight and earns over $1,500. Is it reasonable to take their hours down to 55 to make the $1,500 threshold?

    Ed: Can you reduce an employee’s hours from 67 per fortnight to 55. The answer to that is, in principle, yes, if they agree to it. You can’t do it unilaterally, but you’d need to check the award to check that you were operating below minimum requirements in that award. So, again, that’s one of the things the ACTU has been talking about, saying, look, this isn’t an excuse to run coaching horses through awards. You’re still subject to any award amendments. We’ve seen a couple of them over the last couple of weeks where they have allowed things to change in things like the Clerks award, which has enabled people to work shortened hours and things like that where they might not otherwise be permitted to.

    So we’re going to wrap up there, guys. Best part of an hour again. I think we could spend all day doing this and not quite halfly do it, to be honest. I find it, as I’ve said before, very useful for me to remind me to get outside my bubble and the problems that I’m dealing with day to day as a business owner and to start to share the burden of those. And I’m grateful not just for the questions, but I can also see the community starting to answer each other and support each other through this. So please keep that up. And in the meantime, we’re here help, employsure.com.au/coronavirus, employsure.co.nz/coronavirus. Thanks, guys. See you tomorrow.

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