Tag: entitlements

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What Business Owners need to know about Wage Theft Laws

Posted on | by Allan Hall

New Wage Theft Laws: Criminalisation of Wage Theft

On 1 January 2025, new laws came into effect which criminalises intentional wage underpayments. It is now more critical than ever for businesses to ensure compliance!

Here’s a practical breakdown to help you navigate these changes.

What’s New?

Wage theft has always been illegal, and those caught have always faced hefty fines. However, the government has now introduced more stringent penalties, such as even heftier fines, and for those extremely serious cases, criminal sanctions now apply, such as imprisonment.

What the Law Covers

The new legislation, part of the Closing Loopholes amendments and the Fair Work Act 2009, makes intentional underpayment of wages or entitlements a criminal offense.

This targets employers who knowingly underpay employees, for example:

  • underpaying for hours worked,
  • not compensating for overtime, and
  • withholding entitlements

Penalties for Non-Compliance

The consequences of intentional wage theft include:

  • Corporations: Fines up to $7.825 million or three times the underpayment amount
  • Individuals (Directors/Managers): Fines up to $1.565 million or three times the underpayment amount
  • Severe cases: Up to 10 years imprisonment.

Small Businesses

It is important to note that small businesses (those with fewer than 15 employees) are currently excluded from criminal penalties. However, all businesses should address errors promptly to avoid escalating risks.

Intentional versus Unintentional (‘Honest Mistakes’)

These new laws are targeted at those employers who are caught underpaying their staff in an intentional or deliberate manner. Honest mistakes (such as an accidental payroll error, or misinterpretation of an award entitlement) are exempt from the offence and there will be a clear distinction between genuine errors and intentional wage theft. 

However, businesses should be aware that even unintentional underpayments can lead to increased civil penalties if they remain uncorrected. Repeated mistakes could be interpreted as negligence, resulting in:

  • civil penalties of up to $469,500
  • for serious breaches, Employers may face fines which can escalate to almost $4.7 million, and
  • applicants can now seek a remedy which is three times the amount of the underpayment.

What should Businesses do to address this?

Our team at Allan Hall HR has a wealth of experience in payroll legislation, employment contracts and payroll audits. We can help you to:

  1. Understand Legal Obligations: Business owners should familiarise themselves with relevant employment laws, including minimum wage requirements, overtime pay regulations, and entitlements under fair work instruments such as awards or agreements.
  2. Conduct regular Payroll Audits and Reviews: Conduct regular internal or third-party payroll audits of payroll records and employee contracts to ensure accuracy in wage payments. This can help identify any discrepancies or potential areas of non-compliance. 
  3. Act Quickly on Discrepancies: Resolve underpayment issues immediately to avoid escalations.
  4. Invest in Proper Training: Ensure that staff responsible for payroll and human resources are adequately trained on wage laws and regulations. Provide ongoing education to keep them informed about any updates or changes in legislation.
  5. Implement Clear Policies and Procedures: Establish clear policies and procedures for wage calculation, including overtime, leave entitlements, and superannuation contributions. Make sure employees are aware of their rights and how to report any concerns regarding wage payment.
  6. Keep Detailed Records: Maintain accurate and detailed records of employee hours worked, wages paid, and any additional entitlements. This documentation can serve as evidence of compliance in the event of an audit or investigation.
  7. Promote Transparency and Communication: Foster a culture of transparency and open communication within the organisation. Encourage employees to raise concerns or questions about their wages without fear of retaliation.

Businesses can avoid costly fines and reputational damage by prioritising compliance. Investing in robust payroll processes, training and regular payroll audits is not just about meeting legal obligations, it is also about fostering a culture of accountability and trust in your business.

If you have concerns about paying your workers less than they’re legally entitled to, then contact our team of experienced HR consultants today! We have a wealth of experience in this area and can assist.

Need Assistance?

At Allan Hall HR, we have a team of experienced HR consultants. To learn more about our services, please click here. Alternatively, please feel free to call us on 1300 916 764 or contact us here to discuss any questions you may have with us in regard to wage compliance.

HR Support Centre Demo

We invite all our clients to explore our complimentary HR Support Centre, designed to help you navigate your employee obligations and stay updated on legislative changes. This valuable resource offers ready-to-use HR templates, best practice guidance, checklists, and access to a vast library of articles on compliance and employee management. Book in a free demo today.

CONTACT ALLAN HALL HUMAN RESOURCES

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health insurance

Income thresholds are changing for the private health insurance rebate

Posted on | by Allan Hall

From 1 July, the income thresholds for private health insurance rebate purposes will increase.

Income thresholds

  • The private health insurance rebate is income tested
  • This means that if your income is higher than the relevant income threshold, you may not be eligible to receive a rebate
  • Your rebate entitlement depends on your family status on 30 June
  • Different thresholds apply depending on whether you have a single income or a family income.

When you lodge your tax return, we calculate your income for surcharge purposes and determine your rebate entitlement.

Your entitlement is also based on the age of the oldest person covered by the policy.

The income thresholds used to calculate the Medicare levy surcharge and private health insurance rebate have increased from 1 July 2024.

2024–25 Income thresholds
Family statusBase tierTier 1Tier 2Tier 3
Single$97,000 or less$97,001 – $113,000$113,001 – $151,000$151,001 or more
Family$194,000 or less$194,001 – $226,000$226,001 – $302,000$302,001 or more

Note: The family income threshold is increased by $1,500 for each Medicare levy surcharge dependent child after the first child

Family status on 30 June

Your family status on the last day of the income year (30 June) determines whether the single or family income thresholds apply to you. The information below provides guidance to when single or family thresholds apply.

Depending on your situation, your income may be tested against either the Single income thresholds or Family income thresholds.

Single income thresholds

If you are single on the last day of the income year and have no dependents, you are income tested against the single income thresholds.

This applies even if you had a spouse for the majority of the year, as long as you were single on the last day (30 June) of the income year.

If you separated from your spouse during the financial year and remain single with no dependents on 30 June, your rebate entitlement is calculated only on your own income.

Your entitlement to a private health insurance rebate is based on your income for surcharge purposes.

If you were single on 30 June, but had dependent children, you are considered a family and will be income tested using the family income thresholds.

Family income thresholds

If you had a spouse on the last day of the income year (30 June), your income will be tested against the family income thresholds. Your entitlement to a private health insurance rebate is assessed on your and your spouse’s combined income for surcharge purposes.

The family income thresholds also apply if:

  • you are a single parent with one or more dependents
  • you don’t have a spouse on the last day of the income year and you either maintain a dependent child or children or contribute in a substantial way to the maintenance of a dependent child.

If your spouse died in the income year and you were single on 30 June with no dependants, your and your spouse’s income is used for surcharge purposes to determine your entitlement under the family income thresholds.

If you have two or more children, the family income threshold is increased by $1,500 for every Medicare levy surcharge dependent child after the first child.

Note: Dependent children’s income is not included when calculating family income. Medicare levy surcharge dependent child is different to dependent persons who may be covered by your private health insurance policy.

CONTACT ALLAN HALL BUSINESS ADVISORS

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family domestic violence

Paid Family and Domestic Violence Leave

Posted on | by Allan Hall

10 Days of Paid Family and Domestic Violence Leave Effective from 1 February 2023 

As of 1 February 2023, all employees of non-small business employers (including part-time and casuals) will be able to access 10 days’ paid family and domestic violence leave (FDVL) in each 12-month period. 

Small business employees can access this paid leave from 1 August 2023. Until then, they are entitled to take unpaid family and domestic violence leave.  

To access this paid leave, in accordance with the Fair Work Act requirements, employees will need to provide notice and show evidence that they require the leave to respond to the impact of family and domestic violence, where it is not practical for them to do so outside of working hours. Employers must accept the evidence, provided that a reasonable person would be satisfied that the employee was entitled to take the leave. 

Important payroll implications for businesses 

  • FDVL is counted and paid as time worked. Therefore, an employer must pay the leave at the employee’s full pay rate (inclusive of incentive-based payments and bonuses, loadings, monetary allowances and overtime).  
  • FDVL is reset annually, meaning it does not accrue and each year on the anniversary of employment, the leave count renews to 10 days.  
  • From February 2023, employers must not include information relating to FDVL on the payslip. This includes the balance of leave and when it was taken. FDVL taken by an employee must be recorded on a play slip as ordinary hours of work or another kind of payment for performing work, such as an allowance, bonus or overtime payment. 
  • The balance of or taking of FDVL cannot be displayed on any employee timesheet and attendance portal. There should also be no email or text trail of an employee applying or being permitted this leave. Businesses should restrict record keeping and communication to in person and in writing (in an employee’s physical file) at the workplace only. This is a big change from usual payroll requirements and is for the safety of the victim, as domestic violence offenders will often have access to the victim’s email, work logins and physical mail. 
  • Written notes between the employer and employee that the employee has signed off on should be securely stored to provide evidence that the business has engaged with the employee and provided access to the entitlement, should a future dispute arise as part of an unfair dismissal or adverse action claim.  

Suggested Actions for Employers  

  • inform payroll about the rules in relation to providing family and domestic violence leave information on payslips
  • review or develop a workplace policy which provides guidance for employees who experience family and domestic violence, in respect to accessing leave or additional support
  • implement an Employee Assistance Program (EAP) to provide an anonymous and confidential forum for employees to express their concerns with trained professionals. 

If you would like further guidance or assistance with developing policies and procedures regarding FDVL, implementing new payroll processes, having difficult conversations with employees, or implementing an EAP, please do not hesitate to contact the team at Allan Hall HR.   

Contact us

Our experienced HR Consultants are available to support you with any employee-related questions. Please get in touch with us today on 1300 675 393 or at [email protected] .  

public holiday australia

One-off Public Holiday on 22 September 2022

Posted on | by Allan Hall

Key areas for employers to consider

Thursday 22 September 2022 has been declared a one-off public holiday for the National Day of Mourning for Queen Elizabeth II.

Many of our clients have voiced concerns regarding the impact of this decision on their business, particularly in relation to an unexpected loss of trade, staff rostering, additional overtime payment costs, and reduced cash flow and profits.

Key areas for employers to consider

1. Open for trade – normal public holiday rules and entitlements will apply:

  • Trading rules: Employers who decide to trade on the public holiday must abide by the public holiday trading rules set out by the applicable state/territory government. Further information regarding the public holidays in your state or territory, can be found here: National Day of Mourning and other upcoming public holidays – Fair Work Ombudsman
  • Penalty rates and other award requirements: Employers who choose to remain open on the public holiday are obligated to pay the penalty rates set out in the applicable modern award or enterprise agreement. Other obligations may also apply in relation to the public holiday and your employees. Employers are encouraged to check the applicable modern award/s or enterprise agreement for the current penalty rates and other requirements. Should you need support, our experienced HR Consultants at Allan Hall HR are available to help.

2. Closed for trade:

Permanent employees who would usually work on 22 September are entitled to take the day off, and will be paid their base pay rate for the ordinary hours they would have otherwise worked on that day. The base rate of pay does not include:

  • Incentive based payments
  • Bonuses
  • Loadings
  • Monetary allowances
  • Over time
  • Penalty rates

Employers cannot change an employee’s days/hours to deliberately avoid this payment. Full-time and part-time employees have the right to be absent from work on public holidays, or to be paid the appropriate penalty rates under the applicable award or industrial instrument.

3. Staff scheduling changes:

  • Casual workforce: Employers may need to consider whether they will reduce their casual workforce to save costs or increase their casual workforce to meet an increased demand. Make note of any rostering requirements as per your company policy.
  • Notice regarding a change in roster: An applicable award or industrial instrument may contain requirements in relation to the period of notice required to be given by an employer to change an employee’s roster.

4. Changes to payroll:

  • If payroll is scheduled for 22 September, employers will need to consider delays in bank transfer of wages and whether they may need to move the pay date forward.
  • If an employee already has an annual leave day scheduled on Thursday 22nd, this will now need to be treated as a public holiday for payroll and leave accrual purposes.

Contact us

Our experienced HR Consultants are available to support you with any employee-related questions. Please get in touch with us today on 1300 675 393 or at [email protected].

July

Superannuation Guarantee changes

Posted on | by Allan Hall

Is your system updated for the latest SG changes?

From July 2022, the $450-per-month super guarantee (SG) eligibility threshold was removed.

This means that if an employee meets the other SG eligibility requirements, you must pay them SG, regardless of how much they earn. However, employees under 18 must still work more than 30 hours in a week to be eligible.

It’s important to make sure your payroll and accounting systems have been updated for salary and wages paid from 1 July 2022. This will ensure you correctly calculate your employee’s SG entitlement.

An employee’s eligibility for SG is determined when they are paid, not when they earn the income.

This means if you pay an eligible employee on or after 1 July 2022, you need to pay their super regardless of how much they have earned – even if all or part of the relevant pay period is before 1 July.

The ATO’s Superannuation guarantee eligibility decision tool can help you determine if your employees, including any contractors treated as employees for super purposes, are eligible for super.

You can also check out the Super guarantee contributions calculator to help you work out how much super you need to pay.

CONTACT ALLAN HALL

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Single Touch Payroll Phase 2

Posted on | by Allan Hall

What every small business needs to know

Single Touch Payroll (STP) Phase 2 means every business that employs staff will be required to get on board with the expanded program.

STP Phase 2 requires additional information to be reported to the ATO, enabling other government agencies to leverage the STP infrastructure to receive information and support the administration of the social security system.

Single Touch Payroll Phase 2 in a nutshell

With STP Phase 2 reporting live from 1 January 2022, there’s expanded capturing and sharing of payroll and employee data as compared to the original rollout of Phase 1.

This extended capturing by the ATO is shared more widely with relevant government bodies – such as social services – and fills certain gaps in payroll information sharing that wasn’t previously being transmitted. This new data remit remains an automated process, handled through STP-compliant payroll software such as cloud accounting apps and payroll systems.

What the new is data being shared?

The ATO is looking to patch knowledge gaps in the payroll submission process to support social security purposes and get a better understanding of employee payment details.

So, in addition to the payroll and employee information you’re already sharing through STP Phase 1 (salaries, PAYG, superannuation), Phase 2 involves capturing the following pay items, employee records and new fields:

  • employment basis
  • paid leave
  • allowances
  • overtime
  • cessation details and termination reasons
  • child support deductions
  • salary sacrifice
  • lump sum payments
  • country codes

Under STP phase 2 reporting employers are also required to separately itemise the components which make up the gross earnings amount by reporting all allowances separately, not just expense allowances that may have been deductible on an employee’s individual income tax return.

Digital Service Providers (DSPs)

STP Phase 2 requires employers to fill out employees’ payroll data correctly in your chosen software solution. Be sure to use a DSP that can roll out compliance updates to their software.

Updates to STP will be made by DSPs on users’ behalf and they are working with the ATO to ensure timely and competent compliance and delivery. Employers are already filling out this payroll information, so there are no new fields to capture on your end. In this sense and the automated nature of STP, employers are not required to do anything further than what is already being done under Phase 1.

What it will do is decrease the compliance burden upon businesses in terms of reporting. For example, under Phase 2 employers are no longer required to submit TFN declaration forms.

What will not be changing

The rollout of STP Phase 2 following does not change:

  • the way Single Touch Payroll is reported
  • Single Touch Payroll reporting dates (on or before payday)
  • the types of employee payments required for Single Touch Payroll reporting
  • employers’ current tax and super obligations
  • end of year finalisation requirements and submission responsibilities

The next stage of the Single Touch Payroll (STP) journey is underway

STP Phase 2 will see businesses build on their existing payroll reporting to share more information each pay run.

Most employers are now reporting through STP. You will need to start reporting if you have not yet transitioned, unless you have an exemption or a deferral.

What do business owners need to do?

If you’re currently STP compliant with payroll software that’s enabled, you should be running your payroll as usual. If you’re a Xero or MYOB user, your DSP will confirm when your solution is ready for STP Phase 2 reporting.

If you have any queries or concerns over your payroll solution or if you need reassurance, please consult your Allan Hall bookkeeper or accountant.

CONTACT ALLAN HALL

Related reading

Expansion of STP (Phase 2)
payroll

National Minimum Wage Rise

Posted on | by Allan Hall

The Fair Work Commission has announced two substantial increases to minimum wages

National Minimum Wage Increase 

The National Minimum Wage will increase by 5.2%, amounting to $40 a week. 

The new minimum wage will be $812.60 per week or $21.38 per hour.  

Award minimum wage increase 

The increase to award minimum wages is 4.6%. This is subject to a minimum increase for award classifications of $40 per week and based on a 38-hour week for full-time employees.  

This means the minimum award wages: 

  • Above $869.60 per week, will get a 4.6% increase 
  • Below $869.60 per week, will get a $40 increase 

When do these changes come into effect? 

National Minimum Wage 

The new National Minimum Wage will apply from the first full pay period on or after 1 July 2022.  

Awards 

For most award-covered employees, minimum wages will increase from the first full pay period on or after 1 July 2022. 

However, for employees covered under the awards listed below the increase will be effective from 1 October 2022: 

Aviation
  • Aircraft Cabin Crew Award 
  • Airline Operations – Ground Staff Award 
  • Air Pilots Award 
  • Airport Employees Award 
  • Air Services Australia Enterprise Award 2016 
Hospitality 
  • Hospitality Industry (General) Award 
  • Registered and Licensed Clubs Award 
  • Restaurant Industry Award 
Tourism 
  • Marine Tourism and Charter Vessels Award 
  • Alpine Resorts Award 

Which employees will receive this increase?  

Employees whose minimum wage entitlements are set by:    

  • The national minimum wage    
  • A modern award     
  • A registered agreement (in some circumstances)    

Non-award covered employees 

It is important to note that if you have non-award covered employees on a salary which is above the national minimum wage, you are not obliged to increase their salary. However, with the current job market being so competitive and a shortage of potential employees available in the Australian market, it may be worth undertaking salary benchmarking and considering an increase when undertaking your next salary review process.    

Next steps

  1. Check whether your employees are covered by the national minimum wage, or a modern award.   
  1. Should a modern award apply to your employees, ensure you have correctly classified employees under the relevant award, and confirm the minimum rates of pay that will apply.    
  1. Review the current rates of pay for your employees and, if required, adjust their pay rates from their first full pay period starting on or after the appropriate date as it applies to your modern award.  

Changes to Superannuation from 1 July 2022 

It is important to also note that the increase in the super guarantee rate from 10% to 10.5% will be effective from 1 July 2022. Read more about the changes to superannuation here. 

Contact us

Our experienced HR Consultants at Allan Hall HR are available to answer your queries regarding the wage rise and assist you with salary benchmarking, clarification of awards or any other employee-related matters. Please get in touch with us today on 1300 675 393 or at [email protected] .

July

July changes for super guarantee

Posted on | by Allan Hall

Get ready for changes to super guarantee

From 1 July 2022, two important super guarantee (SG) changes will apply to your business. These are:

  • the rate of SG is increasing from 10% to 10.5%
  • the $450 per month eligibility threshold for when SG is paid is being removed.

3 things you need to do

  1. Check that your software is updated to correctly calculate your employees’ SG entitlement from 1 July 2022.
  2. If the removal of the $450 threshold means you’ll be paying SG for one or more employees for the first time, you’ll need to give them a Standard Choice Form.
  3. If your employee does not provide you with a choice of super fund, review the Stapled Super Fund information on our website for guidance on what you need to do next.  A stapled super fund is an existing super account linked to an individual employee.

What this means for you

These changes mean that from 1 July 2022:

  • you’ll need to make SG contributions at the new rate of 10.5%
  • employees can be eligible for SG, regardless of how much they earn. You may have to pay SG for the first time for some or all of your employees.

The ATO is working with digital service providers (DSPs) to make sure payroll software is updated in time. Their updated online tools and calculators will be available to help from 1 July 2022.

If you use a tax agent, we are also aware of these changes and able to assist you.

CONTACT ALLAN HALL

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gavel

Casual employment legislation

Posted on | by Allan Hall

Important changes to casual employment

With the JobKeeper subsidy now finished, you may be looking at casual employment as a practical solution to help deal with the ebbs and flows of your business.

However, all businesses that currently employ casual staff, or that are looking at engaging casual staff, need to be aware of some important changes introduced under the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 (Bill).

Key Changes under the new legislation

1. Under statutory changes there is a new definition of casual employee.

A person will now be defined as a casual employee if they accept an offer with no firm advance commitment of regular work.

The following considerations will determine this issue:

  • whether the employee can elect to accept or reject work;
  • whether the employee will work as required according to the needs of the employer;
  • whether the employment is described as casual employment; and
  • whether the employee will receive a casual loading.

2. There is an obligation on employers with 15 or more employees to offer casual employees conversion to permanency after 12 months of employment where there has been a regular pattern of hours on an ongoing basis, during at least the last 6 months of that period.

Employers are not obliged to make an offer if there are “reasonable business grounds” not to, but they must notify the employee in writing of their decision not to make the offer.  Where an employee refuses an offer to convert, they no longer hold a right to request conversion at a later date.

3. A new Casual Employment Information Statement is to be provided to each casual employee when they start employment with their employer, in addition to the Fair Work Information Statement that employers already need to provide employees.

4. There is a new statutory offset rule that stops ‘double dipping’ by casual employees who are found to be permanent employees.

If an employee has been misclassified as a casual and has entitlements owing to them as result of the misclassification (such as annual leave), the Court can now offset the casual loading already paid to the employee against any entitlements owing.

Importantly, the offset provision can also apply to historical claims.

Next steps for employers

For employers who engage casuals we recommend you:

  • review your casual employment agreements, to ensure that the wording of the agreement and terms of the engagement means that their casual status will be recognised.
  • review systems for engagement of casual employees to ensure that the new legal requirements are met – such as providing all casual employees with the new Casual Employment Information Statement.
  • review whether your existing casual employees are entitled to convert to permanent employees and ensure your processes comply with the new casual conversion obligations.

Allan Hall Human Resources are workplace experts who are well-placed to help employers navigate all of the above.

If you have any questions or require support, please do not hesitate to contact us directly at [email protected].

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