On 1 September 2020, the Federal Government announced that the Jobkeeper Scheme, introduced by the Coronavirus Payments and Benefits Act 2020 would be extended until 28 March 2021. Previously Jobkeeper was set to end by 28 September 2020. It was also announced that the changes to the Fair Work Act 2009 (Cth) and other amendments which will impact organisations as a result of the COVID-19 pandemic would also be extended.
For a detailed outline on the JobKeeper Scheme and the Fair Work Act reforms, please refer to our earlier article here.
The Extensions of JobKeeper Payments
There are two extension periods, each with two payment rates which employers will need to be aware of:
28 September 2020 to 3 January 2021
The rates of the Jobkeeper payment in this extension period are:
Tier 1: $1,200 per fortnight
Tier 2: $750 per fortnight
4 January 2021 to 28 March 2021
The rates of the Jobkeeper payment in this extension period are:
Tier 1: $1,000 per fortnight
Tier 2: $650 per fortnight
This means that from 28 September 2020, the payment rates have changed for eligible employees.
What this means for Employers currently registered for the JobKeeper Scheme
Employers have until 31 October 2020 to meet the wage conditions for fortnights ending in October for all eligible employees.
Additionally, to remain eligible for Jobkeeper during Extension 1, employers will need to demonstrate to the ATO that it satisfies the decline in turnover for the September 2020 quarter (July, August, September) relative to a comparable period (i.e. July, August, September 2019).
Organisations that are already eligible for Jobkeeper will need to check their continuing eligibility from 1 October 2020. If organisations remain eligible they will be required to submit the relevant information to the ATO and then, between the 1st and 14th of each month, the organisation or registered tax or BAS agent will need to submit a monthly declaration to the ATO to receive reimbursements for payments made in the previous month.
The organisation also will need to select which payment tier it is claiming for each eligible employee or business participant by the first monthly business declaration in November.
Organisations that are new to the JobKeeper Scheme
Organisations that may not have previously qualified for Jobkeeper but which now meet the eligibility requirements, can sign up through the ATO’s online portal.
These organisation will need to satisfy the actual decline in turnover test after enrolment.
The actual turnover test:
- must be done for specific quarters only;
- requires organisation to use actual sales made in the relevant quarter, not projected sales, when working out their GST turnover;
- requires organisations to allocate sales to the relevant quarter in the same way the organisation would report those sales to a particular business activity statement if registered for GST.
For Extension 1: The actual decline in turnover test is satisfied when the current GST turnover for the quarter ending 30 September 2020 (the months of July, August and September) has declined by the specified shortfall percentage (15%, 30% or 50%) in comparison to the current GST turnover for the quarter ending 30 September 2019.
For Extension 2: The actual decline in turnover test is satisfied when the current GST turnover for the quarter ending 31 December 2020 (the months of October, November and December) has declined by the specified shortfall percentage (15%, 30% or 50%) in comparison to the current GST turnover for the quarter ending 31 December 2019.
If the quarter ending in 30 September 2019 or 31 December 2019 is not an appropriate comparison period, an organisation may be able to use an alternative test.
Extension of the new stand down and workforce flexibility provisions
The stand down and workforce flexibility provisions in the Fair Work Act previously allowed an employer to direct an employee to:
- not work on specific day(s) which they would usually work,
- work for a lesser period than the employee would ordinarily work on a particular day or days,
- work a reduced number of hours (compared with the employee’s ordinary hours of work), and not be paid for the period that work is not performed; and
- take paid annual leave.
As a result of the extension by the Federal Government, qualifying employers who are receiving Jobkeeper payments for their employees after 27 September 2020 or which now qualify for the Jobkeeper scheme can:
- give their employees JobKeeper enabling stand down directions (for example, a direction to work less or no hours)
- give their employee’s JobKeeper enabling directions (for example, a direction to change duties or work location)
- make agreements with their employees to change their days or times of work (for example, an agreement that an employee will work on different days).
However, employers are no longer able to use the JobKeeper provisions to make agreements with their employees to take annual leave (including at half pay). Those provisions stopped applying from 28 September 2020 and any agreement that was made under the previous provisions ceases.
Organisations will need to follow the usual rules for taking and requesting annual leave (as set out in contracts, awards or industrial instruments) from 28 September 2020.
Any JobKeeper enabling directions or agreements to change an employee’s days or times of work already in place on 27 September 2020 keep applying after this date as long as the employer continues to qualify for the Scheme and the requirements to give a direction or make an agreement continue to be met. These agreements and directions can only be ceased when they are cancelled, withdrawn or replaced (including by a Fair Work Commission order), or on 29 March 2021 (whichever comes first).
What about Legacy employers?
Legacy employers are organisations which were previously receiving Jobkeeper but are now no longer eligible after 27 September 2020.
Provided that these organisation meet certain conditions, they may be able to continue using some of the stand down and workforce flexibility provisions in the Fair Work Act. However, any Jobkeeper enabling directions or agreements already in place ended on 27 September 2020 and organisations will need to reissue or make a new direction or agreement if they wish to extend beyond this date.
These conditions include:
- previously participating in the JobKeeper scheme, but no longer participating from 28 September 2020;
- demonstrating at least a 10% decline in turnover for a relevant quarter, by obtaining a certificate from an eligible financial service provider, or a statutory declaration for small businesses;
- only using the flexibility provisions in relation to employees that they received JobKeeper payments for before 28 September 2020 and in accordance with enhanced notice and consultation requirements and any other relevant changes applicable to them.
More information about legacy employers and the rules they need to follow can be found here.
How we can help
Moores is currently providing advice and support to many employers navigating the complex requirements of the JobKeeper Scheme. If you’d like to understand your rights, responsibilities and options in light of the Jobkeeper extension, please do not hesitate to contact us.