– Updated as of 21 July 2020 and supersedes previous FAQs–
On 21st July 2020, the Australian government announced an extension and updates to the JobKeeper payment. We’ve unpacked some common questions you may have below such as what is it, what does it mean for you and how has it change? For more information, visit our JobKeeper Q&A blog here.
How long will the JobKeeper 2.0 extension go for?
Originally, the JobKeeper payment was due to run until 27 September 2020, however will now continue to be available for eligible businesses (including self-employed) and not-for-profits until 28 March 2021. There are actually two extensions of JobKeeper. The first extension is until 3 January 2021. The second extension is from 4 January to 28 March 2021.
JobKeeper 2.0 extension will see the existing $1500 per fortnight payment for eligible employees and businesses (working 20 hours or more per week) be reduced to $1200 per fortnight from 28 September 2020 and to $1000 per fortnight from 4 January 2021. From 28 September 2020, those working less than 20 hours per week will receive lower payment rates of $750 from the 28 September 2020 and $650 per fortnight from 4 January 2021. JobKeeper 2.0 will provide a two-tiered payment to employees who qualify. From the 28th of September 2020 until the 3rd of January 2021, the two fortnightly payments will be:
- $1200 (20 hours or more worked per week)
- $750 (under 20 hours worked per week)
From the 4th of January 2021 to the 28th of March 2021, the two fortnightly payments will be:
- $1000 (20 hours or more worked per week)
- $650 (under 20 hours worked per week)
Am I eligible for the JobKeeper extension?
For a business to prove their eligibility for the JobKeeper extension, they must demonstrate that they have suffered ongoing significant decline in turnover as a result of COVID-19. This will be assessed with reference their actual GST turnover in the June and September quarters in 2020. Businesses must prove that they have met the decline in turnover test in both the June and September quarters to remain eligible for the next quarter (28 September – 3 January 2021). From 4 January 2021, businesses and not-for-profits will be required to reassess eligibility based on their turnover. They must demonstrate that they have met the decline in turnover test in the June, September and December quarters to remain eligible for the upcoming JobKeeper payment (4 January 2021 – 28 March 2021). To eligible for the JobKeeper payment, businesses must meet the following decline in turnover: Other eligibility rules for businesses and not-for-profits and their employees remain unchanged. Further information on those rules is at: www.ato.gov.au/General/JobKeeper-Payment
We know that times are challenging and navigating your way around complex changes can be stressful. To help you better understand the changes and what it means for your business, we’re holding a live Q&A with industry experts to unpack the JobKeeper 2.0 extension. Join Ben Thompson (CEO and founder at Employment Hero), Shane Duffy (CEO at Employment Innovations) and Simon Obee (Head of Legal at EI Legal) as they talk about the recent JobKeeper extension announcement and what it means for your business.
– Updated April 2020 –
So you’ve qualified for JobKeeper with the ATO. Next step? Collect the JobKeeper Employee Nomination Notice form from your employees. With only 1 week left to collect these in time to make payments for April, time is running out. Employment Hero’s JobKeeper Wizard is a simple, three-step solution to sending, collating, reporting and managing your JobKeeper Employee Nomination Notices. If you haven’t collected these forms yet, contact us today or continue reading our JobKeeper FAQs for employers.
A walkthrough of the Employment Hero JobKeeper Wizard
In the meantime, there are still many unanswered questions surrounding the JobKeeper payment. From accidentally paying ineligible employees to employees refusing to come into work yet still receiving the JobKeeper payment, here’s the latest JobKeeper FAQs for employers.
How does the ATO supply the JobKeeper subsidy to businesses?
The JobKeeper subsidy is paid by the ATO in arrears per month. Businesses must pay their eligible employees the JobKeeper payment first and will then be reimbursed by the ATO in the following month.
I can’t afford the initial JobKeeper Payment – can I claim the subsidy and then backpay my employees?
No. You cannot claim the subsidy unless you have already paid all eligible employees the JobKeeper payment. If you are unable to make the initial JobKeeper payment, contact your bank regarding a loan.
Do I have to pay all my employees the JobKeeper payment?
Businesses must pay all eligible employees the JobKeeper payment. Jobkeeper operates with a one-in all-in principle, meaning that once an employer decides to participate, it must pay JobKeeper payments to all eligible employees who complete nomination forms.
What happens if I accidentally pay an ineligible employee?
In order to be eligible for the JobKeeper payment, your employees must have completed the JobKeeper Employee Nomination Notice and marked themselves as either eligible or ineligible. This data should be provided to your payroll administrator, who will then make the adjustments for ONLY the employees marked as eligible. Haven’t got these yet? Time’s ticking. Use Employment Hero’s JobKeeper Wizard before it’s too late. The onus is on the employee to complete the form truthfully. If they have marked themselves as eligible when they are not, then the ATO will likely recover the payments from the worker directly.
How will the ATO know which of my employees are eligible?
Before making any JobKeeper payments, have all your employees submit their JobKeeper Employee Nomination Notice. This form will identify which employees are eligible and which are ineligible. Provide this information to your payroll admin. When they next run payroll, they will need to mark each eligible employee as a JobKeeper recipient and the fortnight that they started receiving payments. The ATO will continue to reimburse the organisation for these employees until either:
- The end of the JobKeeper subsidy scheme, or
- The payroll admin ‘switches off’ the payment using the JobKeeper finish function in their payroll platform.
For employees earning their regular wage over $1,500, there is no more admin required (unless the payments need to be ‘switched off’ by the employer). Employees earning less than $1,500, but still working, payroll admins will have to top up individual employees’ pay with the balance one at a time and each pay run (ensuring they receive the minimum of $1,500 per fortnight). For employees standing down, the payroll admin will enter the full $1,500 as a top up amount every pay run for each employee so they receive this minimum as wages per fortnight.
Do I have to pay super?
It depends. If the employee is working and earns over $1,500, then you need to continue paying superannuation as normal. If the employee is working and earning less than $1,500, you must make super contributions for the hours they are working. It is up to the employer if they would like to make super contributions on the top-up amount. If the employee isn’t working, they will receive a minimum of $1,500 and it is up to the employer if they would like to make super contributions on the top-up amount.
An employee has moved away during COVID-19 and cannot come into work. Do they still get the payment?
Every eligible employee must receive the JobKeeper payment. If an employee is unable to work because they have moved away and unable to return, employers should do their best to find alternative duties for the employee to complete remotely. If this isn’t possible, employers can continue to pay the employee the JobKeeper payment, however be wary of other employees feeling hardly done by. Employees who are working may be resentful that they are ending up with the same wage as those who are not. Another alternative could be requesting the out of area employee to take double leave or half pay until their leave is exhausted and then re-address.
An employee is refusing to work – what should I do?
According to Attorney-General and Minister for Industrial Relations Christian Porter, “employees have obligations under their employment contracts to perform work as long as it is safe to do so,” Mr Porter said. “Having an entitlement to JobKeeper does not relieve employees of those obligations.” The JobKeeper Directives give employers the ability to direct employees to work reduced hours, alternative days, perform alternative duties and work in alternative locations. If an employee is refusing to work, they could be threatened with termination for abandonment of employment. The employer would need to prove that they have:
- Explained that the employee is required to work as per their employee contract
- Given the employee the opportunity to perform the work required
- Followed appropriate performance management processes before termination (for example written letters of warning).
In saying that, employers should do their best to encourage their employees to return to work — and remember, you catch more bees with honey than vinegar. Most employees won’t qualify for JobKeeper elsewhere, but in the same vein, their replacement wouldn’t qualify either. It’s in everyone’s best interest to have your employees come back to work.
What do I do with the JobKeeper Employee Nomination Notices after the subsidy ends?
You must store all returned forms for your employees for a minimum of 5 years. According the to Australian Treasury’s fact sheet, “The ATO will conduct compliance and audit activities to ensure the JobKeeper Payment is passed on to employees, as well as to swiftly and effectively address attempted fraud and any other abuse of the scheme.” Employment Hero’s JobKeeper Wizard will automatically store all forms in our cloud-based HRIS.
If you’d like to learn more about JobKeeper, we’ve created this comprehensive guide to help you navigate faqs for employers.
We hope these JobKeeper FAQs for employers will help you navigate these uncertain times. If you’re looking for more ways Employment Hero can help you manage your team, get in touch with one of our small business specialists today.