Facebook Live Event 15: Preparing For The JobKeeper Announcement

Published April 08, 2020 Views: 5

8/4/20

In anticipation of the job keeper and pandemic leave schemes being passed by Parliament, Ed highlights several of the questions that are yet to be answered by the government. Issues like how exactly to prove a downturn in business from COVID-19, if sole traders can make claim, how this affects casuals and more are discussed in today’s live stream.

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 15: Preparing For The JobKeeper Announcement

  • Transcript

    Ed: Hi, everyone. Ed here, tuning in for the usual midday live-stream, talking about all things workplace relations in the COVID-19 crisis.

    I should start by saying this, I’ve said “usual,” but it’s not really usual. Today is probably one of the least usual days that we will have faced as business owners. I say that because right now, the parliament is sitting, and they are going through the debate relating to the question that’s job-keeper allowance, which very literally, and has been said by Christian Porter, the relevant minister, has said it is a life raft for businesses. And I don’t think that can be overstated. It really is the life raft that we’re all relying on, and we’re waiting to see what is going to happen to that today.

    It’s hoped that by mid-afternoon, we’ll have an outcome. And a number of the questions that you’ll no doubt have today will get some solid answers. In the meantime, what I’m gonna spend today doing is going through what we know so far, taking that from, again, all of the documents that I’ve been able to find online, including media overnight, [inaudible 00:01:13] what we should expect by the end of the day.

    You might say, “What’s the point? Let’s just wait till the end of the day.” The truth is, you’ve got to be on your toes at this stage. You’ve got to be planning for what the end of the day might hold. You should be thinking about it today, regardless of the fact that it hasn’t yet been cemented in law.

    Now, before we do that, I just wanted to digress slightly, but I think it’s important, just for our own state of mind as business owners, at this stage of proceedings to just give ourselves a reminder that we’re gonna come through this. We’re gonna come out the other side, and we’re gonna be needing to work hard to recover our businesses and seek opportunity during that time.

    I listened to something earlier this week that I found so spine-tingling and, really, quite reassuring. There’s a bit of a risk in raising this, you can tell from my accent that I’m from the UK originally, and what I’m gonna do is quote a passage from the Queen’s speech to the UK. So bear with me, any Republicans that are watching, but I think even if you fall into that category, you’ll have some respect for what the Queen did in her speech earlier in the week, in terms of the leadership characteristics I think that we should all be showing, as well, to our businesses.

    These are the words I found particularly powerful. She said this, “We will succeed, and that success will belong to every one of us. We should take comfort that while we may have more still to endure, better days will return. We will be with our friends again. We will be with our families again. We will meet again.”

    If you get a chance, have a look at it online. It’s a really, really powerful speech from her. And just those words, “Better days will return,” I think it’s a really good reminder to us as we all go through the process, which seems to be something everyone’s sharing, when we wake up in the morning and we can’t quite believe this is actually happening. And we’re trying to get through that day-to-day, trying to present ourselves to our businesses in a way that doesn’t reflect any worries and concerns that we have. There was some strength and power in her speech that I found comforting, and you might find, as well.

    So, that’s the sidebar. Let’s talk more about job-keeper. So, job-keeper, I’m gonna tell you what we know to-date. Overnight, there have been a few things that, I suppose, add to what we’ve been saying here so far. There’s not that many things that contradict what we’ve been saying, fortunately, but there are a couple of things that I do wanna clarify, particularly as regards sole-traders. There has been a slight change to what we thought the situation would be when this was first announced, a week or so ago.

    So, what do we know so far? First of all, who is eligible? So, what we know is that not-for-profits, who are registered not-for-profits, need to show a 15% downturn in income, that is turnover, it’s called, relative to the same period last year. The period last year that seems to be getting looked at on its face is March. That will be calculated by looking at business activity statement for March, and comparing it to the year prior. So, not-for-profits, 15%.

    For businesses that, and this will be most businesses that will be watching today, with less than a billion turnover, it’s a 30% downturn. I’m just gonna focus on those two groups for a moment, because what we’ve heard as you will know if you’ve seen this before, is the number of questions saying, “Hang on a second, my business doesn’t fit into that cookie-cutter. How am I gonna show 30% downturn? It’s not happened yet, but I know it’s gonna happen around the corner. I didn’t operate last March.”

    We had a classic one yesterday from a client in Townsville, who was saying that because of the floods there, last March, there was no operation, so March this year actually looks better, even though she knows that it’s not actually a good month.

    There’s also a bigger problem that I’m worried about, to be honest, and I hope that this gets clarified today. The vast majority of us will be doing BAS on a quarterly basis as small businesses. A few of you flagged this to me in your comments yesterday. There is now the option to move to monthly BAS, which may be a beneficial thing for you for a couple of reasons, but it might also be detrimental because monthly BAS could mean that you could move to a monthly cash-flow payment of any BAS liabilities, that might not be good for you to do on a monthly basis.

    But assuming you’re on quarterly BAS at the moment, your BAS statement that’s gonna go in at the end of April is for the whole of the quarter ending March. Now in January, February, most of us were wandering along without any idea that this was gonna happen, frankly. In March, you may or may not have been hit by a 30% downturn. So, the question is to how from a quarterly BAS statement there’s gonna be an assessment of this 30% downturn, given that it on its face also includes the January and February period.

    And that’s a real worry for small business because bigger businesses do BAS on a monthly basis, so their March will be more isolated. So, that’s big problem number one that I hope there’s some clarity on today.

    And the big problem number two is this point that we’re not all cookie-cutter businesses. Maybe a BAS statement won’t reflect what we know is a downturn that is happening right as we speak. The position so far has been, and the government has confirmed it in its communication so far, is that there will be a pragmatic approach taken by the ATO. There will be some application process through which the BAS activity to the end of March will be looked at. But it seems that you’ll have the ability to make submissions in addition to that.

    Now, remember, the purpose of this legislation is to save jobs. I anticipate what you’ll need to do is show through your submission that absent the funding, that there will be jobs at risk. My hope is that the government will then take, under the legislation as it gets passed, will then take a pragmatic view and fund people.

    And I say hope and emphasize that, because the problem is this, imagine you are on quarterly BAS, imagine the answer, based on your March BAS is maybe you’ve dropped 25%, and a very literal interpretation is taken by the ATO, and that you’re not granted this from the inception of the scheme at the end of March.

    You then got a whole quarter from the end of March, another three months, almost, from today where you’ve got to say, “Well, hang on a second. I know I’m gonna drop 30% in this quarter where my BAS goes in again, in what will it be? In July. And so for the April, May, June quarter, but do I pay people until when, in the hope that when my BAS gets calculated again, I then get the subsidy and it gets paid back to me?” There’s quite a lot of confusion about that.

    So, if you get a “No” today, let’s face it. There are a number of businesses that will know that tough times are ahead, and I’ve spoken to a number of you, saying “I haven’t yet had 30%. I can see it coming.” The businesses that would have had 30% would have been the ones that would have had an immediate shutdown.

    Beyond that, we all know that the economy is suffering, but you may not yet have had 30% within the space of a month. But it could have been growing over the course of the month. So, watch this space. My hope and plea to the government on this is that we get to a position that is pragmatic, and doesn’t unnecessarily exclude businesses and then undermine the purpose of the legislation.

    Just on that, the scheme is set to start at the end of March. There was some discussion yesterday about the 1st of March being the start of the scheme. It has been confirmed on its face in the draft legislation that it is the end of March, the 30th of March, so you won’t be able to recover wages for March that you have paid. We were asked yesterday about having to top up people over the course of March and so on.

    The only relevance of the 1st of March is the fact that employees to be eligible, if they’re permanent, will need to have been employed on the 1st of March. And if they are casuals, they will need to have had regular and systematic service for 12 months, up to the 1st of March. So, that’s the confusion with the 1st of March versus the 30th. 30th of March is, actually, when the scheme starts.

    But the point about top up and back pay still applies, that you may have run a payroll for April already, you may be just about to run a payroll for April, in which case, I wouldn’t… If you’ve done it already, you shouldn’t have been paying or topping people up to the $1,500 yet, because we don’t yet know the legislation is gonna pass. We presume it will.

    If you’re about to do it in the next 24 hours, I’d still wait. But you may have to go back and top those people up, in order that you get the subsidy in due course, if you qualify. Remember, just because the legislation gets passed today or tomorrow, it doesn’t mean that you are eligible immediately. There will be some form of application process, so don’t rush out and start spending until you’ve got confirmation that you are eligible.

    So, I mentioned that when it starts the businesses that are gonna be able to apply, the employees that it’ll apply to. Just moving on to a couple of other questions that have come through about sole traders. So, the position that was a bit muddled before was, what if you’re a sole-trader who employs people?

    And it was confusing as to whether the sole-trader subsidy, which seems to be that a sole-trader can claim the $1,500 for themselves, whether you’re still able to do that if you’ve also got employees. The answer, as proposed in the legislation is, yes, you can. You can nominate yourself and get the subsidy for your employees if you qualify, in broad terms.

    Also, on top of that, it’s not just sole-traders, directors and partners can also nominate themselves to get the $1,500. But you can only do it for one director, one sole-trader, one partner. You can’t do it for… I’ve seen a number of questions come through from, say, husband and wife teams. You can’t do it for both the husband and the wife. You’d have to nominate one of you.

    Just in that regard, talking about relationships there, the job-keeper subsidy has nothing to do with household income. It’s not being tested in any way. I can say that with certainty.

    So, there’s a bit about sole-traders, and other forms of business entity that people have been asking about. How is this gonna be paid? And this has caused quite a lot of confusion about BAS and when it will be paid, and so on.

    The government has said now that they expect first payments to be made in May, and they will be paid in arrears to the employer. The way in which they’re gonna pay it seems to be through the single-touch payroll system. So, they will calculate through that, which employees are eligible, and they’ll pay back through the single-touch payroll system. It seems that it will be paid in cash, not some form of credit against your BAS or anything like that.

    Equally, those that have asked about debts, if they had a BAS debt, it seems to be said, and whether this will be confirmed, that notwithstanding debts, you will still get cash with the purpose being to keep you in employing people, not to cover off those debts. So, that’s good news if you’ve got any outstanding tax debts that you are otherwise worried about hampering your abilities get through this.

    And that’s a reason why the government seems to be saying you’ll be getting paid this monthly. So, let’s say that you apply in April, based on your March BAS, and you are considered to be eligible. On a monthly basis, the government is going to look through your single-touch payroll from April going forward, and they will pay back per month in May, June, July, all the way through till September.

    If you’re not on single-touch payroll, there’s a number of people who might not be yet, then there will be alternative arrangements to be made. None of this changes the fact that you’re still getting paid in arrears, and you’re still being asked to bridge the cash-flow between what you’re paying your employees today, and when you’ll actually recover this, at earliest in May at some point. So, it’s gonna be at least a month, by the looks of it, that you’ll be having to bridge the cash-flow for those employees.

    Again, there’s also that really sticky problem, which is, what happens if you’re said not to be eligible today, but you believe that as from April, you are eligible, but you’re not gonna submit your BAS statement for April, May, June until July? What do I do with my employees for the next three months? Do I presume eligibility for the future? Is there going to be some other way of contacting the ATO and getting into eligibility? I don’t know. That’s a sticky question for me that needs answering today.

    Those are some of the main points. Just a couple of updates, some curveballs that came out overnight. They’re interesting ones. A few of the questions that the ACTU had been asking the government in relation to casuals, the government seems to say that it’s standing steadfast on the idea that they won’t have casuals of less than 12 months service eligible for the scheme. They’ve used the language that casual needs to be regular and systematic. Let’s see how that plays out today.

    But assuming that those shorter term casuals still aren’t eligible, than regular and systematics. It’s a tricky one, because it’s language the Employment Relations people are used to. But it’s a question of fact-looking at each individual case. I don’t know how on earth the ATO, unless they move away from this individual interpretation of what is regular and systematic, you know, apply at scale to answer the question of eligibility. So, we’re gonna have to see what they say about that today.

    But in principle, you’d be looking for someone that’s worked for 12 months with some level of regularity, and on the basis of that regularity, it doesn’t have to necessarily be full-time hours or anything close to that, but there is a regularity to them working for you.

    The other couple of things that came out overnight is that it seems that under the job-keeper, the government’s position at this stage, is that they are saying that you will be able to use job-keeper subsidy to pay for people that are on annual leave.

    In that regard, what they’re saying is that employees will be able to reserve a period of two weeks of annual leave, regardless what their award or Enterprise Agreement says, and say, “Look, we can’t agree for me to get paid out my annual leave below these two weeks. You can use the job-keeper subsidy to pay for my time on annual leave.”

    It doesn’t seem that you can unilaterally force an employee to go on leave and pay them in that way. That seems to still need an agreement between the employer and employee. Equally, it seems that you can vary the days on which someone works. That seems, also, to still need an agreement between the employer and employee. So that doesn’t, necessarily, we’ll see today, open up some sort of unilateral ability to say, “I need you to come in today instead of your usual Monday,” or whatever it might be.

    You can, though, seemingly, unilaterally change someone’s location and/or their duties, if those changes are reasonable. So, you can ask someone to work in a different place, and you can ask them to do different jobs if there’s a reasonableness to them. So, I think the example used that I saw in the media, overnight, was getting someone who was previously wait staff in a restaurant, to do deliveries for you. So, you could unilaterally get them to do that, which is an expansion on some of the questions we’ve been receiving through here.

    Finally, there’s this curious thing called job-keeper enabled stand down, that’s come out in the media overnight, which seems to say, and all I’m gonna say on this is we need to watch this space, which it seems to say that you can vary an employee’s hours down to the $1,500 bucks per fortnight.

    Now, whether that’s unilateral or you need their agreement, it’s not clear. It seems like it might be unilateral, but I’m hesitant to say that that’s the case until we see the legislation. But it seems that you could say, “Look, I don’t need you to be working full-time, I want you to work down at $1,500 per fortnight.” Let’s see what they say as whether you can unilaterally decide that, or whether you need an agreement.

    Equally, what about moving people up from less than $1,500 to $1,500 worth of hours, so that you’re not talking up for nothing, so to speak? So, there’s still a bit of fogginess around that, unfortunately. But it does seem that there’s gonna be some potential new powers in an employer’s hands as a result of job-keeper, which will be interesting for us to see as the day goes on.

    So, those were the main bits. I just want to flick through my notes, just to check that I’m not missing anything. Yeah, those were the main bits. And I can see as editor, there’s a number of questions coming through. We’ll take those questions now, and go through them.

    And one of the questions I did see overnight is something that is fast-paced has been the movement on all of this stuff, is that people have stopped talking about the cash-flow subsidy that was in place pre job-keeper, which is the up to 100 K over the coming two quarters. If you’re a business with less than $50 million turnover, you’ll get back a credit through your BAS.

    That’s in addition to job-keeper, and you should see that starting to kick in over the BAS cycle. So, watch out for that as well. Don’t forget that that’s also been put in the list of packages that should be coming through to you, as small business owners.

    So, Stewie [SP] what have we got by way of question today?

    Man: Sure. Let’s kick off with Michelle. She’s a client from Coco Ruby. “We are currently, in stand-down mode. We have some employees that cannot do any work from home. Are we able to claim for them through job-keeper? We’re happy for them to have the money even though they are not working.”

    Ed: So, hi, Coco Ruby. Thank you very much, for being a client. The question is, you’ve got some employees on stand-down. They can’t work from home, so they’re sitting at home, not doing any work at the moment. You’re happy for them to have job-keeper money. Can they get it?

    The answer is yes, but you’ll need to pay them the $1,500 bucks and claim it back later. So, there is that cash-flow bridge that we’ve talked about on here before, that you, as a seemingly very generous employer, wants to bridge. Others might not choose to do that, but that’s your decision to make.

    Man: From Steve, with a few people following this, “Does the job-keeper payment attract payroll tax?”

    Ed: Does the job-keeper payment attract payroll tax? So, what I can say with certainty is this, is that to the extent, there’s really three categories of worker that you might be getting job-keeper for, or paying job keep to.

    So, the first is someone that’s doing over and above $1,500 of work per fortnight. You’d be paying them their normal wages in the normal way, and you would be paying the ordinary taxes, both in terms of withholding and any payroll tax that you’re liable to. Have a look at state subsidies in that regard. So, in essence, job-keeper is just an after-the-event subsidy back for $1,500 worth of their wages.

    What is not clear, the second and third category of employees, is that those that are on less than $1,500 and you top them up, and/or those people who are on zero, as Coco Ruby’s just highlighted that they have some employees on that basis, and you’re giving them $1,500. The government is saying you can choose whether to pay super on that, which seems to indicate that they are not consequently wages that you’re paying.

    So, it’s not clear how on accounting methodology you’re meant to do withholding tax on those, and also whether they will create potential payroll tax liabilities. So, I’m not a tax expert, frankly, your accountants will be, so speak to them. But that’s the sort of thing that we’re gonna need some detail on today.

    Man: Samantha asks, “If a casual employee being topped up with job-keeper calls in sick more often, or cancels shifts more often, or is not available to work more often, what are my options?”

    Ed: So, a casual employee that doesn’t earn $1,500 fortnight, you’re topping them up because of eligibility, but they keep canceling shifts, not turning up and so on, what are my options? It appears that if he decided to be part of the scheme, that you’re in the world of topping them up.

    Now, one of the questions that really throbs on the front of the FAQs the government has issued, so far, is this. They have said on its face, that if you are eligible, and you apply, and you get accepted for the job-keeper scheme, it says on its face that you’re meant to pay that to all eligible employees.

    Now, there is a conflict between what’s suggested there and what we’ve been saying here. And the reason for that is this, is that I can’t see a way in which the government can force you to pay $1,500 to let’s say, the malingering casual, or the person that has otherwise agreed unpaid leave.

    I don’t know how they’re gonna force you to pay extra money to those people, just because you are eligible for the scheme and might otherwise be using it to subsidize people who are actually working for you. That’s not clear to me. We’ll have to get an answer out of the government today on that, because otherwise, you’re gonna be behoven to paying people $1,500 and claiming back from the government in due course, when they might otherwise not be playing their part in an employment sense.

    Man: And this is a recurring question that keeps popping up, how does job-keeper work for directors of companies, and also for sole-traders?

    Ed: Sole-traders and directors. So this is where there’s been a bit of a change. So, first of all, you’ll still have to show the requisite downturn for eligibility. If you are a sole-trader with no employees, you would nominate yourself to receive the $1,500 job-keeper. If you have employees, you can nominate yourself and get the job-keeper for those employees.

    If you’re a director, same thing. You can nominate yourself and get it for your employees, as well, even if you’re only getting director’s fees. But you can only do that for one director. Same for partners in companies, you can only do one partner.

    Now, the other interesting one is it suggests that, actually, shareholders that get paid by way of dividend can also do it, but only for one shareholder as well. So, what the message seems to be there is the small business has lots of different ways of incorporating, which no doubt got their purposes that you’ve discussed with your accountants. But you’re not gonna get tripped up by that, [inaudible 00:26:29].

    Man: A question from Sharon, being followed as well. “I know some companies that have already given all of their staff for 20% to 30% pay cut. How is this done legally, and in line with fair work?”

    Ed: So, companies have already given a pay cut, how’s it done legally and in line with fair works? Two things, they may have done a pay cut and also an hour’s cut. So, actually the per-hour rate on any of those people might not have changed. They would only have been able to do that on an agreed basis, so they would have had a negotiation, essentially, with those employees and come to an agreement to reduce their hours and/or pay.

    Even on that basis, you couldn’t reduce their pay below minimum wage. You can’t. Even if an employee, for example, didn’t realize that they were compromising their rights in that way, you’d still have to pay them above minimum wage. But the point is, you can’t do it unilaterally. You need to speak to your employees.

    The big but to that is, but overnight, the media seems to suggest that there may be a way of reducing your hours down to this thing called job-keeper enabled stand down, which is the $1,500 bucks per fortnight. I’m not clear on how that’s actually gonna work in practice, because there’s a big change in employment law, if you can just walk in today and say, “I don’t need you to work these hours anymore. You’re gonna work these hours instead.” Let’s see what they say today.

    Man: From Leann, “Would a person on unpaid maternity leave qualify for job-keeper, that are due back to work in September?”

    Ed: So, someone on unpaid maternity leave, do they qualify for job-keeper? They’re due back in September. So, the FAQs on this say that, essentially, you can pay them job-keeper, if they’re unpaid. If they’re being paid through government scheme, then they’re not eligible, but they are eligible if they’re currently not getting any pay, but they’re on parental leave.

    Now, what is not clear is whether there’s an obligation to pay that, if you’re otherwise claiming job-keeper for other staff. That needs to be clarified, because again, it seems odd to me that they would force you to pay some form of income to someone that wouldn’t otherwise be receiving it, just because your other employees are having their wage subsidized. So, let’s see what they say today.

    Man: From Suzanne, “Can we pay people $750 a week to tie in with our weekly pay run?”

    Ed: Can we pay people $750 per week to tie in with our weekly pay run? I suppose that’s another way of asking, “Do I have to pay fortnightly?” The answer is no. The ATO will be able to work out through your single-touch payroll, notwithstanding your pay cycle, what the qualification levels are for your eligible employees.

    Man: Ken asks, “Can I get job-keeper for an employee working two days and taking the other two days as long-service leave?”

    Ed: Can I get a job-keeper…? Yes, if that person’s working two days, there’s no reason why you can’t do job-keeper. It’s gonna be a question mark as to whether you need to top up or not, but yes, you can if you’re otherwise, eligible.

    Man: From Nimesh [SP], “Should we expect an employee to work set hours or a set routine for business if they’re put on job-keeper? What if they say no, is it fair to direct them to job-seeker instead of job-keeper?”

    Ed: So in the matter of the question about the ability to, essentially, direct people to do certain hours and certain tasks and the job-keeper, I suppose the implied presumption there is that these are hours and tasks that they wouldn’t ordinarily be doing. That’s a really gray area at the moment, it just came out overnight, that the government seems to be saying there may be some form of unilateral power on the part of the employer, now, to direct people to do certain hours, reduce their hours, or so on.

    Now, if that’s the case, and the person says no, then essentially, you’d get into a position where you may need to, otherwise, agree that they go on unpaid leave, and then go off to look at job-seeker. So, that that needs to be worked out today. There’s as a bit of a curveball, as I say, that’s been thrown into the equation in the last 24 hours.

    Man: From Melissa, “Will consultants, like bookkeepers, who are external but on a regular weekly payment be allowed to fit within this? How can these staff be considered?”

    Ed: So, if you’re a true consultant or contractor, including bookkeepers, the way in which it will work is this, is you’d be claiming as sole-traders, if that’s how you’re incorporated or otherwise. And you’d need show a 30% downturn in business. But if you’re not showing a 30% downturn in business, but you’re still doing your work for your clients, even if it’s only one client, then you wouldn’t be able to claim it, unfortunately.

    Man: Question from Abby, “What happens to people who are taking paid leave in April? Will you get job-keeper for them in retrospect?”

    Ed: Someone who’s taking paid leave in April. So, what it seems to say at the moment, is that you can claim job-keeper against paid leave. There’s no suggestion that you can’t, so paid leave, and actually we’ve been saying that on here from the start, so smugly, as though somehow you’re reading the tea leaves, but yes, you can pay against holiday annual leave.

    The only way in which that’s not gonna turn out to be true is if, I know the ACTU doesn’t like that. Whether labor will seek to object to it today in the debate in Parliament, I don’t know, but the government’s position, Christine Porter’s position has been yes, you can set off job-keeper against paid annual leave.

    Man: From Rebecca, in the construction industry, “Our deposits are down for future builds, but cash is fine as it relates to jobs created last year, so revenue will look fine. Are we likely to be excluded from job-keeper?”

    Ed: So, good question about construction. Perhaps a little known fact is that there’s more construction businesses in Australia than any other type of business. So, it’s a big question there. You’ve got construction sites are currently working. They’re allowed to. They’re working through jobs that they’d already had booked. And assuming that their clients are still paying them, they’ll be carrying on, on those. But what they’re being impacted by is people not making decisions about future projects.

    My hope is that when it comes to explaining to the ATO that your impact is this, that actually, you’ll be able to show, even if you can’t show for the March period, that you’ll be able to show over the forthcoming periods that you have had or will have a reduction, and then the ATO will take a view on that so that you maintain your employees.

    Man: A question from Kylie, it’s being followed. “We have an apprentice and they can apply for the apprentice subsidy of 50% of their wages. Are we able to receive job-keeper payments for apprentices, rather than the apprentice subsidy?”

    Ed: So, the apprentice subsidy only applies to certain businesses. It sounds like it is applicable here. The job-keeper is expressed to be available to everyone, unless it is expressly said in the other subsidy, that you’re not entitled to it.

    I haven’t seen, actually, interestingly, anything on the apprentice subsidies say you can’t get both or the other, but you’d need to look closely at that, to see whether the apprentice subsidy says that you can’t have that and job-keeper. So, that’s to be worked out.

    I haven’t actually worked out whether job-keeper is better than the apprentice subsidy. I think that the apprentice subsidy might, actually, be slightly better than job-keeper.

    Man: A general question relating to COVID, from Pamela, “Does your employee have to come to work if it is safe to do so, and you ask them to?”

    Ed: An employee should come to work, yes, if it’s safe to do so, and you have asked them to. There are plenty of circumstances at the moment, though, where an employee is saying, “I don’t want to worry about this than the other. I don’t care what the government says, essentially.”

    And the answer to that is that you’ve really got three options. You’ve got, I’m gonna go from the kindest to the meanest. The kindest option is to say, “Okay, let’s allow you to access any accrued entitlements you have, including your annual leave.”

    The second kindest would be to say, “Okay, let’s put you on unpaid leave then, if you choose not to work.” And the meanest is that you would escalate that to a form of disciplinary issue and, potentially, end up exiting the employee for not following management instructions.

    That’s just as a side point. That’s, sort of, the situation that this pandemic leave is meant to sort out, that for certain industries, pandemic leave if someone is not turning up to work, not because they just don’t want to, but because they’re required to self-isolate, even though they’re fit to work. It’s meant to stop employers from dismissing people in that situation. So, be careful in case this falls in pandemic leave territory.

    Man: From Tony, an interesting one, “Can you convert a casual employee who has worked for less than 12 months to part-time, in order for them to be eligible for job-keeper?”

    Ed: Not now, is the answer, Tony, to be honest. They would need to have been part-time on the 1st of March, so they won’t qualify, unfortunately.

    Man: A recap of an old one from Samantha, “Can employees who have been stood down, who are not working, be paid job-keeper?”

    Ed: Someone stood down, I’m assuming for a moment, that’s a proper stand down, not working, not getting paid, are they eligible? If the company is eligible and they were employed on the 1st of March, etc., then yes, you can pay them, but you’ll have to pay them out of your cash-flow. You’ll recover it from the government, but you’ll have to pay them now and recover it. In May, it seems like the first time you’ll see that cash.

    Man: From Josephine, “Can a part-time employee who transferred from one division of the business to another division of the business as a casual and still being paid by the same company, still be eligible for job-keeper, keeping in mind that they’ve only been working as a casual for three months, and they still have the same payroll number?”

    Ed: So, were they always casual, and they’ve been casual for 12 months?

    Man: It doesn’t say.

    Ed: Okay. So, there’s been some guidance on this. So, it’s a casual that’s, sort of, bouncing around different companies in a group. If they’ve been doing that for 12 months, then yes, they will qualify as long as they’re in the same corporate grouping. So, it doesn’t matter that they might not have 12 months with one particular entity, if they’d be working within a group doing that.

    Man: From Tim, a scenario/question, “Our company has been in significant growth over the past 12 months, opening two new warehouses, and have doubled our staff numbers since April last year. For us to drop the 30% loss on last year is a massive drop to our current turnover, and we would need to close warehouses and drop staff before hitting this number. Twelve months is a long time in a growing business. Where do we stand?”

    Ed: Great. Congratulations to Tim, first of all, on the growth that he’s seen. Yes, there have been variance to this question, including what happened if we just didn’t exist last March? We’re a startup and we’re growing quickly. The only answer I can give at this stage is that I hope the ATO takes a broad pragmatic approach to this. You’re not a cookie-cutter business, none of us are. When you make your submission to the ATO asking for eligibility, you’ll need to add detail around that, to explain that you are suffering business downturn, but that you are not seeing it for X, Y & Z reason, through your BAS statements.

    I’d encourage you all to speak to your accountants about this, as well. I think some sort of communication from your accountant in the context of those submissions is gonna be useful. How the submission has been made? It looks like it’s gonna be online, to try and keep the system flowing so we can get some quick decisions on it.

    I have to say I’m scratching my head there. Over a week ago, there was over half a million businesses that registered interest in job-keeper. I don’t know how many it is today, but how on earth they’re gonna process that many applications, I don’t know. So, I’m assuming that they’re gonna take a pretty broad brush approach, rather than an overly technical one that will exclude Tim and other businesses.

    Man: From Matt, a client, “Can we implement the $1,500 job-keeper on the 16th of April? This is the start of our next pay cycle. Or will it automatically be backdated to the 30th of March?”

    Ed: Okay, Matt asks, it’s a client of ours. Thank you. Can it implement on the 16th of April, or will it automatically be backdated? So, it depends on when you are seeking eligibility or granted eligibility from, and that’s to be determined on what the application process is. But the program starts from the 30th of March, presumably, you’d like to be eligible from the 30th of March, if you can be. And if you pay on the 16th and you don’t yet know about your eligibility, I’d say, don’t pay anything that looks like a job-keeper subsidy at that stage. Just pay your normal wages. And don’t pay those down or anything like that, and then wait and see until you’ve got confirmation. If you have to go back and top up a bit, then so be it. That’s why you’ll need to do.

    Man: A recurring question raised by Penny, who works in childcare. “Most of my 25 staff are casuals who earn a lot less than $750 per week. They would all be eligible, but some only earn less than $100 a week. Do I need to put all on job-keeper?”

    Ed: Good question. This is your classic example in childcare. This is where you’ve got a big number of people on your payroll with varying amounts of income, most of them under the $750 a week. Are you really being asked to put them all on top up, up to $750 a week that you’ve got to cover out of cash-flow somehow, pending repayment in May?

    As I say, there is this curious, sort of, throwaway comment, in some of the documentation from the government so far, which seems to say that it’s almost like a one-in, all-in. But bearing in mind that these people are casual, it doesn’t seem to me that, yeah, if they’ve got over 12 months service, they are potentially eligible.

    But I just can’t see how the government is gonna make you pay, let’s say someone’s earning $100 a week, how the government is gonna enforce that you then top that up to $1,300 on top of that and somehow find the cash-flow to do it. It seems mind boggling to me. So, let’s just watch this space today, and hopefully we’ll get some clarity on that.

    Man: We’ve touched on this, but it’s worth another question from Simon. “I contract all of my staff as independent contractors. Do we, as a company, qualify to pay job-keeper to these contractors who qualify?”

    Ed: So, Simon pays all people as independent contractors?

    Man: Yeah.

    Ed: So, assuming they are independent contractors, and you pay them as that on invoice and so on, then it would be up to them as sole-traders or otherwise, to make applications to job-keeper themselves. Because you don’t pay them through payroll, they won’t show up as being eligible employees.

    Man: Alicia asks, “I’ve heard of a few businesses forcing employees to take their leave entitlements with no mutual agreement. How can they do this legally? And is this an option for business owners?”

    Ed: So, as of right now, the idea of forcing someone to take leave and entitlements would be at breach of employment law. So, I don’t know who those businesses are. I duly hope they’re not clients of employees sure, because they shouldn’t be doing that if we’re advising them correctly. They need to be consulting with those employees. And if they’ve got a good strong relationship with those employees, they may well find a good amount of collaboration, and people agree to go on paid or unpaid leave. But they shouldn’t be forcing people to do that.

    I’d say as of right now, because of this curious concept of a job-keeper-enabled stand down, and what that’s going to mean. It seems to be saying over the course of just reading through the media, that you can get people to go on leave, but it still needs to be by agreement, but they can’t go below two weeks leave. There’s just a lot of funkiness about it at the moment, that we need some clarification on today.

    Man: From Stephanie, “If a casual employee has applied for job-seeker in the meantime, how, if at all, does this transition to job-keeper?”

    Ed: So, if a casual employee has applied for job-seeker, and let’s say they’ve been granted it, and they subsequently get job-keeper, let’s say they’re on agreed unpaid leave at the moment, and you decide to give them job-keeper, they have a policy of obligation to update Centrelink to say, “Hey, my financial circumstances have changed,” which may then reduce our entitlement to job-seeker. It would mean that that entitlement or that benefit would stop.

    Man: A question, recap question, “If we make an employee redundant, how much time do we have to pay out the annual leave component?”

    Ed: So, if you make some redundant, how much time do you have to pay out the annual leave component, i.e. in any redundancy package? So, let’s assume for a moment, even if you made someone redundant today, they would have some period of notice to work for you, and you should, ideally, pay that out when you pay out their final entitlements, which would normally be, at the very latest, in the payroll following the termination date.

    Man: This is being followed from a company called Beefed Up, to do with trust inquiries. “If the trust pays the two directors of the trust a salary, would they qualify for two employee payments under the job-keeper scheme?”

    Ed: So, Beefed Up asks if the trust pays, say they have a trust, as a lot of people that will be incorporated as trusts, and they have employees query, including the two directors, they would be entitled to job-keeper as employees. Assuming they get employed by the trust or by the trustee, then yes, they would be paid as employees. If they’re just getting it by way of earnings drawdowns from the the trust, then only one of them would be able to get it.

    Man: From Lorraine, and it’s being followed with some interest, “Will there be an obligation to repay, if you do not fall 30%, even if you did, in truth, expect to?”

    Ed: So, Lorraine asks, if you get the eligibility, you think you’re gonna be 30 down, you managed to persuade the ATO to give it to you, and then you don’t, will you be obliged to repay? That doesn’t seem to be a suggestion in any way, at this stage, but there does seem to be an ongoing obligation to, sort of, play by the rules, if you’d like, and get in touch with the ATO and say, “You know what? I haven’t gone down 30, I shouldn’t be continuing to get this.”

    So, there’s a suggestion that they’ll be looking for abuse of it. How they’re gonna do that and enforce that, again, I don’t know. It’s gonna be very difficult for them to do, but there’s a sort of, ask by the government for us all to act in the spirit of what’s going on at the moment, and we should all do the right thing.

    Just as an aside, you’ve seen overnight in the UK, where there’s been a bit of a tide turn where on a semi-equivalent thing to the job-keeper package, well-funded organizations, our premier league soccer clubs are starting to get a bit of a tongue-lashing from the public for seeking to use it when they don’t really need to, financially. So, I suspect that there’ll be an equivalent sentiment over here, as well, and people will be wanting to do the right thing so as not to spoil it for everyone else.

    Man: A few questions coming along the lines of this one, “I’ve got a casual employee on eight hours per week. Do I need to pay $1,500 or just their normal wage until job-keeper happens? Or do I need to pay the full amount from now on?”

    Ed: So, someone under $1,500 a fortnight, should I pay them the top-up now? No, please don’t. Wait, and not just for the legislation today or tomorrow. Wait to see if you are deemed to be eligible. As I say, hundreds of thousands of business, if not millions of businesses, are gonna be contacting the ATO to say, “Am I eligible?”

    There may be a backlog in getting through confirmation to your eligibility. The last thing you wanna be doing is paying out that money now, and being held with a cash-flow problem because you end up being deemed not to be eligible, in due course.

    Man: From Tony, an employee Shaw client, “I have been forced to stand down 20 casuals, thus far, in my business. If all of these casuals qualify for job-keeper, am I obligated to offer all casuals a position, or can I choose how many casuals my business requires? Based on my loss of business, I may only require six casuals.”

    Ed: That’s a great question from Tony. So he’s got 20 casuals, I’m not sure about permanent staff, but he’s got 20 casuals, none of them working at the moment, doesn’t think he’ll need all 20 of them going forward. It sounds like all 20 of them have got the 12 months service, that means that they are eligible. Does he have to do it for all 20?

    So again, this is my view, and I emphasize, this is my view. I cannot see a way in which the government requires you to pay out $1,500 bucks per fortnight to 20 people that you prospectively don’t need for your work. I suspect it will only be on the six that you do need. But that goes hand-in-hand with the number of questions that we’re getting is, do I have to do this for everyone, or just for some employees?

    My view would be that you are claiming it for those people that you are paying, and need to pay, and need to retain. But particularly in the case of casuals, where regardless of the fact they’ve got regular and systematic engagement by you, they shouldn’t, as true casuals, if they are true casuals, shouldn’t have any entitlement to additional hours or anything like that. So, you should simply be able to stop their employment. There’s a lot of greyness around that, that I really wanna see clarified today.

    Man: From Cheryl, “We have put our casuals off, and we’re struggling to keep the four full-timers, even with job-keeper. There is just no work for four. Can I stand down two staff, and they get job-keeper?”

    Ed: So, four permanent staff members, not enough work for them. Can two of them be stood down and the other two get job-keeper? So, this goes hand-in-hand with the point that I was just making there, which is that I can’t see how in a case where, first of all, it doesn’t sound like you’d be able to stand those people down, subject to what comes out today with this job-keeper-enabled stand down concept.

    But as the Fair Work Act sits right now, you can stand down those two people, because you’ve got a slowdown in work, not a shutdown. It may be if you haven’t got enough work for all four people, what you’d need to do is consult them as to whether they could all reduce their hours to a level that could be subsidized by job-keeper. If that’s not possible, then you may need to look at other alternatives. It may mean that you have to look at laying off a couple of people through a redundancy process. But let’s see what happens with this, sort of, job-keeper-enabled stand-down today to see if that helps you out.

    Man: From Lisa, she’s a client, she works in manufacturing, and she puts a scenario. “How about if you’re making Easter a six-day break, a bit like when you shut down at Christmas? We need to spread our work and want staff to take unpaid or annual leave if they agree.”

    Ed: So, can you make Easter a shutdown period, a bit like Christmas, and get staff to take unpaid or paid annual leave? So, a few questions wrapped up in that. In theory, yes, you could have a shutdown. There are notice requirements on the shutdown. You need to get reasonable notice, subject to what particular award say, as well. So, be very careful about that with the specific awards in your business, Lisa.

    But in theory, yes, you could have a shutdown. In a shutdown, you would ordinarily pay people annual leave if they’ve got an accrued. If they don’t, then there’s a possibility of not paying them during that period. So, have a look at all of those things.

    I just wanna sort of scream out, for a moment, here. There’s real oddity with the question of shutdown, stand-down, and public holidays. This is, really, a live issue, with Friday and Monday coming up. If your employees would otherwise have worked on Friday and Monday, if they are on a stand-down, even though you’re not obliged to pay them for the non-public holiday days, you are, under the Fair Work Act, required to pay them for Friday and Monday.

    So you have this real oddity in your payroll that you need to pay them for those two days if they would otherwise worked, even though you might not have any other obligation to pay them. That’s gonna have to mesh together with whatever comes out of job-keeper in the next 24 hours. But be very, very careful about. I just don’t wanna hear about businesses getting caught with underpayments post these public holidays. I really wish fair work had been a bit clearer about that, because they’ve said nothing on the subject, so far.

    Now, back to Lisa, can she shut down her business for six days? If she gave reasonable notice, yes, potentially. But the simpler way of doing that is to agree that with the employees and just have a consultation, as it sounds like it’s possible in her case.

    Man: Paul asks a pretty hot question at the moment, just a general recap, or clarity on how do you show 30% downturn?

    Ed: How do you show 30% downturn? So, the government seems to be saying it will be done on your March BAS, whether that’s the end of the March quarter or the March month, depending on how frequently you do your BAS returns.

    Again, you can apparently choose to do monthly BAS returns at the moment, even if you’re on a quarter cycle, like most small businesses. They’ll look at it versus the prior March, if that’s available. You will also be able to make submissions to the effect that it doesn’t show 30%, this is why, but I should still be considered. That seems to be the process as I can best determine at this stage.

    Man: Sujin asks, “What can we do to support the migrant visa employees who are not eligible for either job-keeper or job-seeker?”

    Ed: Great question. You’ve got migrant employees under whichever visa arrangements they are under, maybe student visas, maybe working all day, and maybe sponsorship. They don’t seem to be able to get job-keeper or job-seeker. There’s a lot of people, and I don’t think it’s exaggerating to say, this could cause real problems. In Australia, we have a large migrant workforce, and these people, currently, are not being subsidized by the government. So, there’s sort of disincentive to carry on with them on your books.

    Be careful, first of all, if you end up terminating their employment, because you’re not getting subsidies. That wouldn’t change the fact that there’s a potential discrimination claim there, if you terminated them on grounds related to their residency rights, and so forth, working rights.

    Second to that, if you want to look after them and carry on paying them, it would be coming out of the business’s own pocket, without the subsidy. That’s a business decision for you to take, but I’d ask you to take that within the context of being very wary of potential claims and things like discrimination if you get it wrong.

    Man: Samantha asks, “I terminated an employee on March, 3. Do they have any eligibility for job-keeper, or do they need to seek alternative assistance individually from Centrelink?”

    Ed: So, an employee that was terminated, I’m assuming a permanent employee, on March the third. No, they won’t have any eligibility for job-keeper, even if your business is, because the scheme might start on March, the 30th.

    Good, excellent guys. This is another hour that’s flown by. I hope that that’s been some use to you. We will carry on, as ever, answering your questions through Facebook. We’d also encourage you to look at the resources on employer.com.au/coronavirus, [inaudible 00:56:27].co.nz/coronavirus. They’re being updated frequently.

    I can also confirm for the clients out there who had a number of questions about, will we be providing documents to you to help communication about job-keeper and so forth, with your staff? Yes, is the answer. You’ll be getting an email from us today, giving you an update on the status quo as it is, and the resources that are gonna be available to you, so that you can act quickly, deal with this as we see it come out of Parliament, and hopefully, passed into legislation the next 24 hours.

    So guys, good luck. Tomorrow, we’ll know a lot more. I have no doubt it’ll be a busy session. We’ll focus again on job-keeper, tomorrow, and then we’ll carry on helping people out and taking the direction as we see it from you guys. Thank you.

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