Facebook Live Event 9: Job Keeper Wage Subsidy Announcement

Published March 31, 2020 Views: 4


Everyone is talking about the new job keeper wage subsidy that was announced by the government yesterday. Ed goes over the details of this subsidy, including which areas still need to be clarified by Parliament. He also briefly discusses some of the changes happening internationally in the UK and New Zealand and, as always, answers some of your pressing questions from the comments.

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 9: Job Keeper Wage Subsidy Announcement

  • Transcript

    Ed: Hi everyone. Ed Mallett here. Just checking in on a sunny day here in Sydney. And a sunny day for a couple of reasons. Massive news last night from the federal government about the new job keeper allowance. That will have changed the mood of a lot of people that are watching this live stream I’m sure. And I’ll talk in detail about that now as far as we know at this stage. Not much new news in New Zealand. I can say, as a business owner there that even though we’re in complete lockdown over there, we’re still managing to do business over there, which is pleasing for us. We’re still speaking to businesses regularly who are doing their best to start transitioning into the planning and then the opportunity stage, hoping that that the dynamic approach taken by the New Zealand government means that there’ll be coming out of this sooner rather than later. So pleasing to see that businesses are doing their best to get ready for that over there.

    Back to the news here about job keeper, in Australia. I have to say, I went home last night buzzing after I saw the announcement. Very pleased to see that the government has really stepped up on this.

    And you might say, well, why am I so enthusiastic about it? It seems like it’s less than the 80% offered over in the UK, for example. What seems to be getting offered here was $1,500 per employee, if they’re part-time, full-time, or they’ve been a casual for over 12 months. How is that anywhere near the 80% offered in the UK? Well, the big difference is this, and this is why it’s an important distinction. In the UK, you have to have stood down or laid off your employees on unpaid leave in order to get that payment. So they call that furloughing your staff, which other people are calling mothballing your business, for example. So essentially, if you go into some form of shutdown or a proportion of your staff are not required to work, you can seek payment in the UK, stressing this is in the UK, for those employees.

    The big difference here is that you can get that $1,500 per fortnight, per employee, whether or not they are working. So ideally, you’d be able to carry on paying them and have them carry on working, which in the UK wouldn’t attract to subsidy, but over here, it’s gonna allow you to keep working and have some of your wages paid or if necessary then you can seek to put them on leave and they can get that job keeper allowance during that period as well, which means that they won’t be completely out of pocket and you may choose to top it up by some amount as well. So a really exciting thing that very broadly speaking, on a rough percentage, assuming that your business qualifies for it, you could be looking at about 30% of your wage bill being covered. There are some exceptions to that and I’ll go through those as we’re seeing them at the moment.

    Every cloud has a silver lining as they say, but I’m sure there’s a flip side to that as well, which is that, in this particular case, it’s not all sunshine. There are some clouds in this. The cloud that I’m gonna talk about with this is that the government has sort of come out with a big announcement and asked us all to go back into the world of making sure we’re employing people, maybe even grabbing those people out of Centrelink queues that have previously been asked to go on leave without pay or stood down and getting them back into your workforce.

    Now, pause briefly before you do that, because, at this moment, this is not a promise from the government. And I should stress that it has to be legislated. It hasn’t yet been legislated. At the moment it’s just an idea. Now, the government seem pretty convinced that they’re gonna get this through as legislation with limited problem. But there is a risk that you could see some adjustment from this. You could see the opposition take a view that is simply not sustainable as a cost for the country.

    So those are questions that will be answered over the next seven or so days, but a bit cheekily, a bit naughty, I think the government has announced it as though it is already in play and that off you go and start bringing people back onto your books and taking that expense, remembering that you won’t actually see this $1,500 per fortnight, per employee until your BAS returns. So you won’t be getting it next week. You’ll be having fish into your pockets as soon as you start employing people again or keeping them on your books hoping that in due course you get those payments through your BAS and that you’re also eligible.

    So, one of the things here to give you an insight for Employsure that we’re trying to work out, we don’t yet know the answer because it isn’t legislation. All that there is at the moment is a fact sheet, which is sitting on the treasury website. I’m gonna have a look at it. But it really is a fact sheet saying this is what we’re hoping it’s going to be. And one of the key aspects of that is that only certain businesses are eligible for it.

    I’m gonna focus on businesses with less than 1 billion in turnover because, obviously, there are different kettle of fish businesses above that level, and I’m assuming people watching this, like us, are not $1 billion companies. But if you’re a business with less than 1 billion in turnover, you need to have had your turnover reduced by 30% relative to a comparable period a year ago or at least a month. So you need to be saying that your March is essentially 30% down on a year ago.

    That may be possible for a number of businesses. If you’re working on pure sales to revenue basis or cash type business, say a shop or a cafe or a restaurant. But it may not be possible for those businesses that operate in more of a subscription environment. So, if for example, you are a gym and you’ve been forced to shut down, but you haven’t put your membership subscriptions on hold, you might not have actually gone down by 30%, so you may not have access on the face of it to this prospective job keeper payment.

    So there are some questions on that. So we, for example, as a subscription business, when we’re doing the modeling that I discussed yesterday and mentioned in my post last night about our why, our what, we’re looking at this and saying, we expect the impacts, financially, to take a while to come through to us. What we will see, we think, is that small businesses will have challenges that we will have to help them with in paying for subscription, but that doesn’t hit us in March. It probably takes a few months to come through the cycle to us. And we hope that when that does come through, we can look at applying for the wage subsidy then. But at this stage, on our March, it might be difficult to actually get that subsidy.

    Now, is that fair on our employees? Probably not because, us, like other businesses that might be suffering that problem, still need to consider how we’re gonna address our issue of costs. We don’t know the answer to that yet. And the reason we don’t know the answer to that is because this isn’t law. So be very careful guys. The government’s asked you to rush back out and grab people from the Centrelink queues. You don’t know for sure that you’re gonna get that money yet either because it may not come into law in the format that’s been proposed or because you’re a specific business and the way in which revenue in your specific business means that you can’t make the best of the job keeper payment as it’s set out.

    Another way in which you may find that it’s not that helpful is this idea of only applying to full-time, part-time or casuals that have been with you for over a year. So, think about that in the context of a number of businesses. The reason why we’ve seen such extensive Centrelink queues, I think, is because the casual workforce has been largely impacted so far by things like restaurant closures or limitations to doing takeaway trade and things like pubs and hospitality businesses which have a lot of casual staff. Now, those casual staff may well have worked for less than a year, in which case, they’re not going to get the support of this job keeper benefit as it is currently proposed and they will still need to go and seek new staff and so forth.

    So there are some twists and turns in this. Like I say, it’s a largely very sunny bit of news for businesses. And I went home in a very positive frame of mind, but I suppose I woke up this morning saying, “Well, I’ve got to be sure that I’m gonna get it, otherwise, it’s not good news for me at all.” It is, however, I should stress, very good news for a number of our clients. I’m excited from that regard, regardless of what it actually means for Employsure.

    So, guys, stand by and watch out for this. You’ll get either the need to make some quick business decisions. Do you take the government at their word and this at face value and start rushing out and grabbing your employees again and or continuing to employ them or do you take another approach? And I’ll answer some of those questions as we go through them in a moment.

    Before we do, just a flag. I promised yesterday that I’d put up our internal why, how, what documents, which you will see on our Facebook page there now. As I’ve said, and that document is not gospel, it’s not intended to solve everyone’s planning challenges through the COVID-19 crisis. It’s just a bit of transparency from us to say, look, this is what we’re doing. This is how we’re trying to stay clear in our thinking, not to descend into panic and make rash decisions, but to make them based upon a structure and a business plan. The strategy for which I’ve said a number of times now is for us to prepare for the worst, but to plan for the best.

    And that’s the approach that we’re trying to take. And we might just find that a useful insight into how we are thinking. And it may give you a structure through which to do your own planning. You may think it’s a load of rubbish, frankly. And please, let me know either way. I’d appreciate the feedback. I see this very much as a collaborative session with fellow business owners and I’d really appreciate any insights as to what you’re doing and how we could be improving the way that we’re planning. So please, either post in response or DM me.

    And then, just as we go on to the questions and answers, I do increasingly as we move through this week and get onto the sense of opportunity that might be out there for businesses, I’d love a few shout outs from businesses, clients, and non-clients just telling me what it is that they’re doing to pivot in order to get themselves through this crisis and try and maintain their cash flow. What are the sort of things that they’re trying to do which are enabling them to develop their business?

    So, I mentioned business school Stagekings the other day. Interestingly, we’ve started working with them here to start getting desks out to our staff who are struggling working at home with ergonomic challenges. Stagekings, you might, Deskkings, that’s my bad name. They should maybe consider that. Copyrighted it here. Stagekings are producing desks. They previously did sets for large events, which they’re no longer able to do, but they are producing some very well-priced desks that we’re looking at buying for our staff that need help with desks at home.

    And so, those sorts of things really excite me and I’d love to share some of those stories and collaborate as we go through the week looking at the sort of opportunities that might be available.

    All of that said, I can see the questions coming thick and fast and they almost all are applying to job keeper, I think. So, let’s do as much time as we can going through some of those questions.

    Stu, what have you got for me?

    Stu: Straight from the feed. Ted asks, do we have to be ordered to shut down in order to gain access to job keeper?

    Ed: No, not at all. On the proposal, again, you’re gonna get bored of me saying this. At the moment it is a proposal, it is not law. Quite the opposite. The government and I have to say that for all of the complaints and grumbles that I and others have had about the position of the government on this. Pierre Morrison in Australia has been very focused on keeping business going as far as possible. Once again you see me here in my office today, I see that as a permissible thing to do in the context of the restrictions that are in place. And Pierre Morrison is stressing that if you can operate, then you should be operating. And the job keeper very much aligns with that, that you carry on operating if you can.

    Stu: David asks, if staff have been stood down, can we bring them back for some hours to do some training so that when we do restart, all the training is completed and thus save future training costs?

    Ed: Okay. Parking job keeper for a moment on that, let’s assume that they’d been stood down properly. Capital S, capital D, a proper stand down situation under the Fair Work Act and that they’ve gone off and got job seeker, new start, some other benefit. If you were to bring them back in for training, you would need to pay them for that on some sort of arrangement, maybe a casual arrangement. And if you did that, that could, in turn, put at risk their new staff funding because they’d have to disclose other income that they’re getting. So, there’s a bit of a balance there, but there’s nothing in principle to stop you from bringing them back for training, but you would need to pay them for it.

    In terms of the job keeper, what you should now be looking at is whether, in fact, you will be better off keeping them employed rather than stood down and them receiving the job keeper allowance versus whatever they may be getting from new start. And consequently, they could be doing that training under the benefit of the job keeper allowance, that $1,500 per fortnight may pay them for the sort of time that you would require them in to do training

    Stu: From Naomi. What happens for staff on leave such as maternity leave as of March the 1st?

    Ed: As of March the 1st, so they need to be employed as of March the 1st to qualify, certainly, for the initial round of job keeper. If someone is on maternity leave they remain employed by you. In Australia, they don’t receive the period on leave to count towards their service, but they remain employed by you. So I’m thinking out loud slightly here that if they’re on unpaid leave by that stage and exhausted any statutory entitlement, I suspect they won’t get job keeper, but that hasn’t yet been clarified. That may come out in the detail. And when they come to return from maternity leave, parental leave, that maybe that you then bring them on to job keeper at that stage. But those sorts of details haven’t been clarified yet.

    Stu: Ward asks, what about employees who have already received a redundancy package?

    Ed: So, two things. So, job keeper is not a set of handcuffs that stops you from making redundancies. As I say, the reality is some businesses might not be able to access job keeper for various reasons. That doesn’t mean that they can’t then make redundancies. Even if you can access it, redundancy may be something that you need to consider because it doesn’t pay 100% of your staff costs. It may be that that gap of 70% odd is still too much for you to stomach as a business.

    If someone has already been paid a redundancy, so you’ve already exited them from the business and paid them redundancy entitlements, if bringing them back into the business would be useful to you and having them, essentially, over on leave with job keeper or in the business doing work with job keeper and potentially a top-up from the employer, then you can always reverse that situation. There’s nothing wrong with going to them and saying, “Look, actually, this is an opportunity. Do you wanna come back into the workplace? This is how the financials will look.” And it may be that they’re better off doing that. It may be that you’re better off doing that. You’ll have to approach that with the individual employee. You can’t force them to do it. So if you’ve already exited them from the employment, they would need to come back by agreement.

    Stu: From Nick. What about companies that do not have a consistent revenue stream? How could we demonstrate the reduction in revenue?

    Ed: A really good question. The details aren’t clear on this. Is the government going to be very strict in the way it applies it or are they going to look at things like, for example, your new business sales in any given month even you’ve got some underlying revenue? So again, for Employsure, that’s the way we would see ourselves impacted immediately is two things. We’d expect our new business sales to slow down. Second of all, we might see our clients with less ability to pay their ongoing subscriptions. And those are the things that we’re planning for in terms of our planning for the worst. But we might not see that happen for a few months. So we don’t know yet whether we can apply and whether we will be accepted for job keeper. That will come out in the detail.

    If you have inconsistent underlying revenue and you may, well, for example, have had a reasonable March this month, but you had a terrible March last March and therefore, it looks like you’ve had an improvement in that snapshot. I suspect that there will be bigger ways to look at this, more lateral ways to look at this, to show that, in fact, you’re being affected by COVID-19. My hope is that the government doesn’t take a highly technical approach and that actually, collaboration with accountants and so forth will be constructive in order to get businesses across the line. Ultimately, what you don’t want is job keeper being undermined by the fact that people can’t get it and then, consequently, having to make redundancies, which is defeating its very purpose.

    So, watch this space for the details on it, but there will be lots of questions around those sorts of things just as there are, interestingly, in New Zealand, where the 30% downturn rule is also being applied to their subsidies

    Stu: From Diana. An employee went from full-time for three years to casual just two weeks ago. Do they qualify?

    Ed: Yes, in principle, subject to how these rules actually get legislated. But they’ve been full-time for three years and now casual, but they would still have that three years of service essentially in the bank. So, I’d be amazed if they didn’t qualify. When all the details are said and done, it should be the case that they should

    Stu: From Susan. Do you have to be open as a business to receive this new job keeper for my full and part-time employees?

    Ed: You don’t have to be open as a business, but you do need to have the employees on your books when you submit your BAS statement. So if you didn’t have any employment outgoings, then there’d be no way of assessing you as having employees in order to pay you back through BAS or give you the credit or however it’s gonna work through BAS. So, let’s say your business was not operating and you had already stood everyone down on a true basis, then you’d struggle, in my understanding, to get the job keeper because you wouldn’t have any salary being paid out through your books at this stage and you, therefore, wouldn’t be able to get the credit back. You’d need to go and grab those employees back, put them on your books, in order that you could, in turn, claim job keeper.

    Now, the risk is that because the details are so scant at the moment, if you go and grab them back, put them on your boat and something happens so that this doesn’t legislate as is currently being said to be, then you could end up with a situation where you’ve got those employees and the costs that you’ve been paying out to them on the presumption that you’re gonna get that $1,500 a fortnight back for them and you don’t. The government might be sounding very generous at the moment, but they’re not really actually in a position to give a complete promise in that regard.

    Stu: From Greg. If an employee was receiving a wage of more than $1,500 per fortnight, are employers obligated to continue paying at that rate or can they temporarily reduce pay to $1,500 per fortnight for those employees?

    Ed: So, a really good question. So, an employee was receiving more than $1,500 per fortnight. Essentially, what are my employer obligations as a consequence? Do I need to carry on paying them more? Can I drop the pay to $1,500? I think the big siren that was flashing on the top of this last night for me as I was watching the press conference was this, is that this is not any sort of rule, mandate, permission to underpay staff. So you can’t suddenly say, “Oh great, I’ll just take the job keeper allowance and that’s all I’ll pay them, but I’ll get them to do a 38-hour week still.” If the people are working for you and they are completing work which commands wages either on a minimum or contractual basis over and above the $1,500, the starting point is that you have to pay them that and you will receive, essentially, $1,500 back from the government for that. A quirk in this I’ll come back to later on is that $1,500 doesn’t attract superannuation, interestingly. So you would pay them over and above the $1,500, you top it up to what it is that they are due.

    Now, that doesn’t change your entitlement to negotiate their hours and or their pay if they’re being paid above minimum wage down to a lower level so that your top up could be less than you might otherwise be having to pay people for the work that they’re doing. Now, if someone is getting a salary over and above the $1,500 and they’ve essentially been stood down, then what you would essentially be saying is, come back on board for the $1,500. You’re not required to work during this period, but I will continue to employ you on the basis that you receive the $1,500. The risk is you’re gonna pay out that $1,500 every fortnight until you get that back through your BAS, if you do, because this hasn’t yet been legislated.

    Stu: A related question from David. Where someone works less than $1,500, can you compel them to work extra hours?

    Ed: I was just scratching my head reading that. I’m gonna read out from this thing that was on this fact sheet, again, that was on the treasury website because this confused me quite a lot. So it says this, bullet point, ensure that each eligible employee receives at least $1,500 per fortnight before tax. So you’re an eligible employee and then the employer has to ensure that you receive at least that, it says. For employees that were already receiving this amount from the employer, then their income will not change. So if you’re getting that or more, then your income doesn’t change. Subject to what I just said about negotiation.

    For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee to $1,500 before tax. So they’re saying if you were receiving less than $1,500, let’s say that you are a casual or a part-timer that’s receiving under $1,500 because of the hours that you are working, it sounds from what they’re saying, that the government is just gonna give a blanket $1,500 and your responsibility as an employer is to ensure that they are topped up to the $1,500 amount.

    So let’s say someone was only earning a grand a fortnight from you, you would have to pay them an extra $1,500 because you’re gonna get $1,500 from the government. So the government is saying that you can’t benefit from that $500 gap, essentially. So you’ve got to up the employee’s wages. Now, you should logically be able to ask that employee to do more work for you. Although that isn’t clear from this. Compel is always quite a scary word. In the world of employment relations, there’s not many ways in which you can compel people to do things. So I would say that you talk collaboratively with your employee and say, “Look, you’re about to get, essentially, more than your current pay. Can you help me through this time and do this additional work?”

    Stu: From Joe? Can employers who have already been shut down, that is, who had full-time employees, pay out leave entitlements first before going on to job seeker payments or do job seeker payments take, for instance?

    Ed: If you’ve got a true shutdown situation and the consequent stand down situation, there is no obligation to pay out annual leave and other entitlements before someone goes on to job seeker payments, new staff type payments, there’s no obligation if you like to clear out entitlements. In fact, there’s a number of awards that wouldn’t allow you to do that. So, what you’re doing is saying, I have had a shutdown. There is consequently a stand down. Those employees can go now and apply for a new start or equivalent.

    Stu: From Nikki, a related question. What happens to anyone that’s taken a salary drop but is still working full time? Our whole team accepted a pay drop to help support the business and retain all the team.

    Ed: Well done to that business owner. So the question was, what happens if someone has taken a salary drop but he’s still working full time? And I presume the question is, what does job keeper do in that situation? So, the situation is, assuming that you’ve managed to retain those people on full-time but drop their wages, not below minimum wage. I say well done because you’ve successfully gone through that negotiation with your staff and it speaks volumes of your culture that they’ve been willing to work collaboratively with you.

    Now, what will happen with this is you’ll carry on working them full time. They’ll work for you full time. You will submit your BAS in the ordinary way, assuming this all goes through government and comes out the other side in the way that it is currently said to be. You’ll receive $1,500 per fortnight per employee if they are part-time, full time, and or casual over 12 months working for you on the 1st of March. So you will start to receive those payments back on the reduced wage. You can decide whether you actually wanna go back to your staff and take them back up to that higher wage, bearing in mind you’re now getting this support from the government.

    Stu: From Chelsea. For hairdressers that are still open, but downtown is over 30%, do our workers need to be able to work specific hours for this?

    Ed: No, they don’t need to be working specific hours. The rule, as I just went through as to how much they’re getting paid per fortnight. If they’re getting paid less than $1,500 per fortnight, then you’ll need to top them up so that you’re not receiving a credit beyond their income. And in that case, you might be talking to them about doing additional hours. And let’s assume for the moment that they are earning over $1,500 per fortnight, it doesn’t matter if the hours have gone up or down in the period prior to now, as long as they’re earning over $1,500, a fortnight. That’s what you’ll get from the government.

    Stu: From Mary. I’ve engaged a contractor to assist me for the past two months during a busy time. Are they eligible at all for job keeper while in my company?

    Ed: So the question is contractors being engaged, are they eligible for job keeper whilst they’re in the company? If they are a true contractor, then that’s really a question for them to work out that probably have been engaged through an ABN and so forth, and they’ll need to work out whether they can get jobs keeper themselves through their company. You wouldn’t typically be able to, if they’re a true contractor, be able to claim job keeper before them because they wouldn’t appear on your payroll through BAS.

    Stu: From Demo [SP]. How are we expected to afford $1,500 per employee upfront and then chase the dollars back later through BAS?

    Ed: A good question from Damo. Thank you, Demo. How are we expected to pay $1,500 upfront and then chase the payment through BAS? A really fair point Damo. As I said, I should probably work out what the opposite of every cloud having a silver lining, being this is the opposite of that in that the government is saying how it were being incredibly generous, but you’re gonna have to pay this out of your cash flow and wait for us to pay you back through BAS when the time comes on a quarterly basis. So you will have a cash gap, guys.

    And the second aspect to that is this is not law yet. So you’re being asked to believe in the government that this is going to get passed through parliament and soon enough it will be law in its current form and that you won’t have gone out and started paying money to employees out of your cashflow, which is highly vulnerable at this stage and consequently find that you’re left without the support that government’s saying is going to be there. Like, I’m not saying it’s not going to be there. They seem pretty confident in that, but there are plenty of questions that will be asked and should be asked before this becomes legislation.

    Stu: Kate asks, can we negotiate with our staff to work less hours to avoid having to top up wages? In short, can we negotiate their hours down to cover just the job seeker payment? This may allow us to keep them employed as an alternative to redundancy

    Ed: Kate, I think it was asked, can we negotiate our staff salaries down to the same level or near the $1,500 per fortnight in order to avoid future redundancies? That is the purpose of the payment, to avoid future redundancy. So yes, you can have that negotiation, but bear in mind, as I said before, this in no way sanctions, no way endorses underpayment of wages. So you couldn’t say, “Hey, we’re only gonna pay you $1,500 a fortnight, but we require you to carry on doing the same hours,” which would mean that $1,500 per fortnight is not your minimum wage. So, you can’t ask people to do more for less unless they’re getting paid above minimum wage and they’re willing to agree to a negotiation down.

    Stu: From Penny . How about a business like gyms who employ instructors, some who get only $50 a week? Are they entitled to the $750 a week?

    Ed: So a good question from Penny. Gyms. Let’s say someone’s on, by their hours only earning $50, $100 a week, a couple of hundred dollars per fortnight, what’s the obligation? Now, a likelihood is that they’re on some sort of casual arrangement. So if they’ve been with you over a year, then they in principle qualify for this. That means that according to the current statement from the government that you are required to top up the 1000 plus dollars that you’re going to get on top of what you’re actually paying them. So presumably, you’d be asking them to do additional work, additional work that you might not have, bearing in mind your gym is shut and consequently, getting that payment back from the government.

    So that’s when it gets very tricky, to be honest, and quite messy, that, that may well be better for them than being on some form of new start payment and you’re being asked to fish into your pocket to pay it out because the government is gonna pay you to have them essentially on stand down. So yes, they’re gonna get more than their $100 or $200 a week through this, but you’ll be required to fund the cash flow of that until you get the BAS return.

    Stu: From Osher. Does it apply to staff who are currently on paid leave?

    Ed: So Osher asks, does this apply to staff who are currently on paid leave? So I’m gonna assume for a moment that was either personal or annual leave and that those people are continuing to work for you. They haven’t been stood down. In which case, yes, they would be appearing on your payroll when your BAS submission comes and they would get this in the ordinary course of events that they might at least be on paid leave until the time at which you’re getting this back through BAS. If the question is, I have negotiated unpaid leave with them and they’re currently out on unpaid leave, what happens then? Then the answer as I said is that they will need to be on your payroll and you will need to, essentially, start paying them $1,500 per fortnight, even if they’re not doing any work for it. So they are on unpaid leave, but you’re gonna give them $1,500 a fortnight for which the government will then pay you back through BAS.

    Stu: From Daniella. Do companies working on startups with no revenue qualify?

    Ed: Stu, I was scratching my head on this this morning. Daniella says, what about startups? We don’t have any revenue. Do we qualify? And I think that that question can probably go in the bucket of not all businesses are the same. We all have very different ways in which we earn our income. We’re all at different stages of our life cycles. So, you might have a startup as well… Sorry to sound like I’m not answering Daniella’s question, but let’s say you were start up who last March was making next to nothing if not nothing, in your revenue. And now, this March, you’re making a bit, but it’s nowhere near what you’d projected because of the impact of the Coronavirus. So your business is being impacted, but it’s not 30% down on last March because of your growth trajectory.

    Now, my presumption is that the government, like I say, is gonna use quite a bullet brush to help collaborate with businesses in order to achieve the ultimate objective, which is to keep people in work. Now, if you’re in a startup and the alternative to not getting the job keeper allowance is that people are gonna lose their jobs. My hope is that with the right support from your accountant and so forth in your submission, that the government will seek to help you out. But I can’t promise that because there is no legislation to give you a critical analysis of that at the moment. The thing I would say is go onto the ATO website and they’re calling it register your interest. I think some about 60,000 businesses as of an hour or so ago had already done that. But that’s all it is at the moment. You’re not confirming that you’re gonna get it, you’re just registering your interest.

    Stu: A related question to one previous from Justin. Should I be starting to pay my part-time employees $1,500 per fortnight now? They otherwise only earn about $600 per fortnight.

    Ed: Yeah. Look, again, Justin is in that pain point, which is probably now I’m hearing these questions come through is gonna be a bigger pain point than perhaps I’ve realized with businesses. And that is that part time employees are not earning $1,500 a fortnight at the moment. They might have been stood down, they might be on agreed unpaid leave, they may still be working. Does Justin need to top that up to $1,500 now out of his own pocket? So, to add to his burden, he’s got to actually now increase his cash burden pending the BAS relief, assuming the BAS relief is gonna come because, at the moment, he doesn’t know that that’s gonna be the case because this hasn’t been legislated.

    My honest advice to Justin would be, don’t do it yet. Pause and wait and see what happens here. Explain to your employees that you’re trying to understand what is going on with this, but don’t rush into it and start paying extra money out of your pocket at this stage. Stay in cash-preservation mode and see how this lands once it starts to get legislated.

    Stu: From Sariah. Can apprentices receive job keeper payments?

    Ed: I believe so. Yeah. Again, details to be provided, but they are employed, and they should receive job keeper payments as well.

    Stu: From Tanya. What about self-employed people? Do they qualify?

    Ed: Good question. I’m gonna dart into this again here. There seem to be a suggestion here that businesses without employees, maybe because you’re self employed, can register their interests. So you can go online and register for the job keeper payment. You’ll need to provide an ABN. So this perhaps goes back to the contractor question as well. This is what any contractors in your business should be doing. Nominate an individual to receive the payment. People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for payments. Now remember, the self employee will need to show a 30% decline in their income. So if they haven’t lost 30% of their income, either by negotiation or a slow down in their business, then they might not be eligible

    Stu: From Stacy. What about if we have staff on annual leave? As we don’t have enough work, do we have to cancel their leave and then let them work from home?

    Ed: So, a question from Stacy, a staffer on annual leave because we don’t have enough work, do we have to cancel their annual leave and have them work from home?

    I’m gonna presume that that’s annual leave without pay for the moment that you’ve negotiated that there is no work and you’ve done an agreed negotiation with staff that they essentially go home without pay. What you would do there is you would start paying them out of your own pocket, $1,500 per fortnight, and then you would recover that through your BAS. So you would show that notwithstanding the agreed unpaid leave, you’re actually gonna pay them $1,500 a fortnight each and then you’d recover that. The risk, of course, is that that’s gonna come out of your pocket. It’s extra cashflow burden at this time. And the risk is that once all is said and done on this, it doesn’t look exactly like it’s being suggested today.

    Stu: From Peter. Who pays the 9.5% super? The employer or the government?

    Ed: No one, apparently. That’s the oddity on it. So, let’s keep the numbers round for a moment. Let’s say that someone was earning $2,000 per fortnight, the recovery of the 1,500 comes from the government. They’re saying that doesn’t attract the superannuation guarantee. Consequently, you’re only paying super on the $500 as I understand it.

    Stu: From Andriana. Can more than two people work in one office? They have their own offices but are sharing kitchen and toilet.

    Ed: Yes, is the short answer to that. It’s subject to social distancing as far as reasonably practicable and also subject to the question of whether that work can reasonably be done at home. So, I made this point yesterday about I’m sitting in my office here with three other people, we’re social distancing and we’re all one-half meters apart and we see that we couldn’t reasonably carry out this work at home, so we needed to do it in the office. So you can do the same thing.

    Stu: From Jared. What if I run a startup company with less than 12 months trading?

    Ed: Great question, Jared. He says, what if I run a startup company with less than 12 months trading? It goes back to my answer earlier about the difficulty in showing this 30% downturn. In fact, Jared may have growing revenues, albeit not growing with the steepness of a curve that he would like. Is he gonna be able to get the benefit, the job keeper benefit? The answer on the face of it is it looks like he might struggle, but that’s why I think that they’re gonna have to take a pretty broad approach to the 30% downturn rule because otherwise, businesses in their early phases like Jared’s are gonna suffer and those are exactly the guys that we should be encouraging to carry on employing people at this stage.

    Stu: From Rebecca. Some of my staff don’t want this as it will affect their current Centrelink benefits. Is there any option to not do this for all the staff?

    Ed: So the question is, some of my staff prefer their Centrelink benefits. And I have to say I haven’t sat down and cross-referred them and seen which one would make you better off and so forth. But assuming your staff are right in saying that they’re gonna be better off with Centrelink benefits and don’t want this, there is no obligation, it seems, from the government to say that you have to do this. There is an encouragement to do it and they’re encouraging you to employ people, but if you are a staff member that has been stood down or you’re a casual that is otherwise now on Centrelink benefits, there’s no obligation to drag you back off that and put you back in the workplace

    Stu: From Andy. If employers normally pay weekly, can we back-pay employees for the month when the legislation comes through?

    Ed: The question is if you play pay people weekly, can you back-pay when the legislation comes through? So I think the way in which is being suggested then, so there’s already been a number of payments in March and we’re coming into the fourth week of payments, and maybe even the fifth week now of payments in March. What will happen is that when you submit your BAS return, you will get the credits from that under the job keeper scheme. If the question is my employees were receiving less than the 1,500 per fortnight, then in essence, what you’ll need to do and show in your BAS return is that you have back-paid them and topped them up for the weeks that they’ve already been paid.

    Stu: From Leah. If you have a combination of part-time and casuals, can you pick and choose who you do job keeper for?

    Ed: A good question. So Leah, was it?

    Stu: Yes.

    Ed: Leah wants to know whether you got part-timers and casuals, can you pick and choose who you do job keeper for? In a way, yes, because job keeper isn’t absolute, it doesn’t say, for example, you’ve got 10 staff and you must keep your 10 staff and that’s the way it’s got to work and you can only have job keeper if you carry on with all of those 10 staff. This doesn’t, again, handcuff you from making other business decisions like whether you might need to make redundancies, whether you wanna lay off casual staff. So you could lay off casual staff, reduce their hours and so forth. And therefore, if you like to select people that are going to get job keeper and who won’t, but if they are on your payroll, you will get the job keeper for them.

    Stu: From Jackie. Will we need to set up a new pay item in our payroll system?

    Ed: Jackie, honestly, I don’t know. With payroll systems, you need to speak to a payroll specialist about that. I don’t believe that that’s the case. I think as, they say, it’s gonna get done though a single-touch payroll, which the ATO will be able to read and be able to consequently identify how many people should be getting job keeper, but I don’t think you need to actually categorize it as a separate item.

    Stu: From Debra. Are small business owners who have PAYG employees entitled to personally claim the job keeper allowance if they have substantially reduced their own salary to keep the business going?

    Ed: The question is, if you’re a small business owner, you’re also a PAYG employee of your business, will you get the job keeper if you have substantially reduced your income? The answer, you don’t need to show that the substantial reduction in your income. If you’re a PAYG employee, you should get job keeper. So in Empoysure’s case, I’m PAYG employee at Employsure, assuming we qualify for job keeper, then $1,500 will get credited with relation to my employment as well as everyone else’s here.

    Stu: Adam asks, can I stand someone down due to business downturn, even though the government still sees us as an essential service and has not told the business to stand down?

    Ed: If the business sees you as an essential service and you have not experienced a stoppage in work, otherwise, then, no, you can’t stand down, but you can discuss agreed leave with your employee, which as of yesterday, we would have pulled unpaid leave. Today, what you might be discussing with them is job keeper leave, let’s call it, where you go on leave and you get nothing but the job keeper allowance. But Adam will need to pay the 1,500 per fortnight until he recovers that through his BAS.

    Stu: Sarah asks, what happens with staff that were on the books on the 1st of March but have since resigned from their position? Are they eligible to ask for their job back and receive the job keeper payment?

    Ed: So Sarah is asking really interesting questions. So the nooks and crannies of this that come out when you actually play it out for real. Staff members post 1st of March who have resigned, are they eligible to come and get their job back and get job keeper for it. So first things first. For the period that they worked post the 1st of March, they will appear on your payroll for BAS. As I understand it, you will receive the credit for that period. That 1,500 will come through. Now, assuming they’ve already been paid over and above 1,500, you don’t need to go after them with that money. That’s money that you’re being paid back for having already paid them. If they resigned and want to come back to the job now, that’s a matter between you and them. You’ve got to choose whether you want them back. If you don’t, you’re under no obligation to take them back just because there’s now job keeper availability.

    Stu: Penny asks for some clarity. Can you please clarify how it works for part-time employees? Do they now get the $1,500 even if they have only been getting paid, say $100 a fortnight as a part-timer?

    Ed: That seems to be the case, Penny, I think it was. She says, can I clarify the position with part-time employees? If they’re gonna be getting $100 a fortnight, do they now get $1,500 a fortnight? And as I say, I’m reading this from the fact sheet that’s on the treasury website. And that seems to be the case. It says there for employees that have been receiving less than $1,500 per fortnight, the employer will need to top up the payment to the employee to $1,500 before tax. Importantly, I’ve seen a couple of questions come through and say, is this before or after tax? So yes, Penny is required to fish into her pocket and pay the difference between the $100 per fortnight and the $1,500 per fortnight because, ultimately, she’s gonna receive that back from the government. So she needs to start paying more cash out to those employees, which is tricky.

    And I have to say, when I started this live stream today, I hadn’t realized how tricky that was gonna be for people. But the more questions that come through, the more I see this as a weakness in the program. But these are the sort of things that will get debated in parliament. And this is why I can’t just take that fact sheet at face value and say that’s exactly how it’s gonna work because that’s not law at the moment.

    Stu: A question from Bill. My March will look decent due to Ford [SP] orders being finished off from summer. It’s an air conditioning business. April is where we’ll start to feel the pinch. Would we be eligible from April onwards if March is too good numbers-wise?

    Ed: Bill asks, what happens if March looks decent? Like any good business owner, he knows that where his business is coming from and he’s worried about April. And assuming April shows a 30% downturn, will he be able to claim from April? The answer is it’s unclear at the moment. Bill, will you be able to claim from April, including March? Will it just be for your payroll from the 1st of April? No one knows at this stage because the rules about how they’re gonna calculate downturn and so forth are just not clear enough at the moment.

    Stu: And this is directly related from Angeline. We will see a downturn later than others. So do we wait until we have the confirmation from ATO to know whether we will qualify for job keeper before we start paying?

    Ed: Sorry, can you say that one again, Stu?

    Stu: Yeah. We will see a downturn later than some others. Do we wait until we have a confirmation from the ATO to know whether we will qualify for job keeper before we start paying?

    Ed: It’s another one about downturn. So downturn is not clear yet. Should we wait for a confirmation before we start paying this? It’s a big business decision that you don’t know that you’re gonna get job keeper. Should you take the risk in paying it out and then finding you’re not eligible? Honestly, my strategy here would be to say no, you can’t afford to take that risk if that risk means that you put your business at threat. You need to wait for clarification. So I’d register with the ATO and then go from there as and when we get greater clarity,

    Stu: From Richard. Plenty of casuals have more than one job with more than one employer. So, which employer is responsible for paying the 1500?

    Ed: So, plenty of casuals have jobs with more than one employer. Another really great question. Which employer is responsible for paying the $1,500, assuming that they’ve got more than 12 months working with one or more of those employers? Because if they don’t have the 12 months, then they wouldn’t be eligible anyway. On its face, it seems to say that any employer that has someone that’s worked with them in a casual capacity for over 12 months would have to pay the 1500, which would be a bit of a burden for the person who’s got 10, $100 jobs, in any given week. So I can’t believe that’s actually how it’s gonna happen. But these are again, the sort of questions that they’ll work through when it gets debated in parliament.

    Stu: One final one from Helen. The government hasn’t mentioned sole traders with staff. I don’t get my full detail of my income until the end of the financial year as a sole trader. Do I still get the $1,500 per fortnight as well?

    Ed: So the government hasn’t mentioned sole traders with staff. Do I get the $1,500 per fortnight? Circumstance being that the sole trader…

    Stu: I don’t get my full detail of my income until the end of the financial year being a sole trader.

    Ed: Because you don’t know what your income is as a sole trader.

    Stu: Yeah.

    Again, unclear at this stage. This time the government hasn’t mentioned it. Again, my hope is that they take a broad brush view as to what the 30% downturn shows. So even though you might not have filed your tax and therefore showing any decline over income, that there’ll be a more practical view taken to how you can claim this as a sole trader. So, we’ve been going the best part of an hour, guys, and questions are still coming thick and fast. I’m more than happy to keep answering them. Just a flag. I saw one point made by one of the viewers who said that on the superannuation you do need as an employer to pay on the first $1,500 as well. I’ll confirm that and I’ll post that on here to make sure that no one’s getting that wrong through their payroll.

    I’m gonna read out one last question, which is Sabrina Smittens. I’m concerned that as a business we jump on board on the job keeper straight away, but then we find we peak and trough through the 30% loss, will the $1,500 payment be paid to us? Sabrina, another really great question. You’re predicting that you’re gonna have a 30% loss. Next month goes well and the month after not so well. You haven’t had the immediate impact of COVID-19 yet, but you see it and then you don’t. You managed to pivot the business and improve it. All of those questions need to be thrashed out by parliament to start understanding it.

    And the only way I can see them coming to a practical resolution is that they’re gonna have to take a pretty broad brush approach. And so when you look at countries like the UK that don’t have this 30% gate on it. And 30%, by the way, is pretty arbitrary. You know, does the business that’s only suffered 28%, they’re still having a pretty awful downturn, but do they not get the benefit of this? You know, the government’s gonna have to look at this in a pragmatic way that I hope means that we see some sense in the people that might otherwise struggle to work to that strict rule to get the benefit of job keeper. Remembering the purpose of it is to keep people employed.

    So, thank you very much for your time, guys. We will as ever go through these questions over the course of the day. We’re also updating the resources on our website, employsure.com.au/coronavirus. And New Zealand, employsure.co.nz/coronavirus. Feel free to give us a call as well, guys, with any of these questions, we’ll seek to answer them. Clients, call your normal client number. You’ll see on our website a number for anyone that’s not yet a client and you’re welcome to come through and ask these questions. I wouldn’t ordinarily say that I tried myself to call through, just as a test, to see if the Fair Work Ombudsman was available to answer these questions and they’re suffering call-wait-times of well over half an hour. So, if you can’t get through there, we’re here to help, guys. That’s genuinely what we wanna do and let’s see if we can help you with these questions as the days go on during this week and we see any further changes and any further detail. ‘

    Thanks for your help, guys, and I shall speak to you via these questions over the course of the day answering them as we go. Cheers.

Have a question?

Have a question that hasn't been answered? Fill in the form below and one of our experts will contact you back.

  • This field is for validation purposes and should be left unchanged.

Call Now

0800 568 012

Live Chat

Click here