We’ve been getting dozens of questions from readers about the Morrison government’s $130 billion JobKeeper wage subsidy package now that applications have opened.
Here is a collection of the most frequently asked as late.
I’m struggling to convince my JobKeeper-eligible casuals to take shifts, what does the law say?
We’ve had multiple questions over the last week from employers saying they’re struggling to convince their JobKeeper eligible-casual employees to work, because the $1,500 fortnightly JobKeeper payments must be passed on as a minimum to eligible employees.
“Just finished a conversation with an employee that was advised by the ATO this morning that they do not need to work more than one hour a week to qualify for the JobKeeper entitlement,” one reader writes.
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“Another friend of mine, their workers at a ticket sales company for corporate events, he wanted them to do around 20 hours a week to do some cold calling and push of a product that could actually be viable in this market, yet they found out this now known loophole and is extremely struggling to motivate them to work.”
It turns out, this is quite a tricky question. The ATO has said it’s still working out the finer details of its advice on this point, but what do the JobKeeper laws passed by parliament have to say?
— Matt Barrie (@matt_barrie) April 22, 2020
As we’ve previously explained, JobKeeper-eligible employers have a few extraordinary powers put in place to enable the wage subsidy scheme to work. These include the ability to issue stand down directions, and also vary times and days of work with agreement from employees.
Stand down directions can reduce hours of work, but not the base hourly rate of pay. Employers can also vary time and days of work with written agreement from employees, who aren’t allowed to unreasonably refuse these requests.
JobKeeper employers can agree with employees to work on different days or at different times, provided:
- Doing the work at a different time or on a different day is safe (in regards to COVID-19); and
- The change does not reduce that worker’s number of hours worked.
It’s not entirely clear whether employers are allowed to use these roster variance agreements to increase work hours beyond ordinary arrangements for casuals, but if employers approach workers with written requests to vary their work time or days, employees are obliged to consider those requests.
Under the normal (non-JobKeeper) operation of workplace laws, casuals are entitled to refuse shifts when offered.
Athena Koelmeyer, managing director at Workplace Law, says “in the ‘old days’ pre-COVID-19, casuals could always refuse shifts, that is one of the deals with true casual employment, unlike permanent employment where employees have to turn up and work when the employer requires it”.
The Fair Work Act stipulates that ordinary workplace laws apply outside the scope of JobKeeper powers.
We’re a pre-revenue startup, can we access the JobKeeper program under the ATO’s alternative test?
The ATO yesterday released details about the alternative test for businesses which don’t meet headline JobKeeper eligibility criteria.
We’ve received questions about eligibility from readers working through the pre-revenue stage of their companies, and those which only started booking revenue six-or-so months ago.
Any insight/interpretation on existing business with significant decline vs each of the last 6 months revenue figures.
Last year most months zero, consistent revenue begins ~October… March it takes a dive.
— Nathan Clark (@nthnclrk) April 23, 2020
It doesn’t look too good for pre-revenue startups in terms of JobKeeper eligibility. Under the JobKeeper laws, the ATO is obliged to consider alternative tests where there’s “not an appropriate relevant comparison period”, but this concerns turnover.
There are provisions for business which have not been in operation for 12 months, and one for businesses which have an irregular turnover or have witnessed a substantial increase.
But even alternative tests for businesses younger than a year are based on when a business commenced operation, meaning the ATO is concerned with turnover comparisons for operating firms.
There is no specific provision outlined in the alternative test which makes allowance for firms which only started booking revenue six months ago, but had commenced business in a pre-revenue stage before that.
There may be some flexibility under a generous interpretation of “irregular turnover” for pre-revenue startups, although for now, this remains unclear. We’ll endeavour to clarify with the ATO.
I don’t want to pay workers for April if I don’t know whether I’ll be JobKeeper eligible. How will we find out if we’re successful?
Here’s a question we’ve had a few times over the last month. It’s certainly a difficult situation for firms unsure whether they’ll be accepted to make decisions about staffing that could cost them thousands of dollars in tight times.
“We don’t want to pay everyone the $1500.00 per fortnight or the difference between that and their normal wage and then find our application has been denied,” one reader says.
Let’s break it down. Essentially, businesses won’t find out whether they’re eligible for JobKeeper until their application has been processed and either denied or accepted by the ATO. But this isn’t very helpful, is it?
This is a known issue, so much so the government has actually stepped in, yesterday announcing it would make “bridging finance” (debt) available for businesses struggling to pay their workers before being reimbursed for JobKeeper.
We’ve explained what that looks like in a dedicated article here, but essentially, the major banks are fast-tracking unsecured loans for SMEs applying for JobKeeper.
Treasurer Josh Frydenberg, who negotiated the stopgap measure, has encouraged firms to contact their banks to inquire about these loans.
What happens after JobKeeper? Will I have to pay staff annual leave and other entitlements accrued over that time?
The short answer here is yes. Permanent workers still accrue their typical entitlements over the JobKeeper period, irrespective of whether a business is the one ultimately paying those wages.
Businesses are not allowed to withhold a portion of the $1,500 fortnightly payment as entitlement reimbursement, or for any other reason whatsoever.
Employers are allowed to decrease hours worked under stand down directions, which would reduce the rate at which leave entitlements are accrued.
However, employers are not allowed to reduce the hourly base rate of pay, and wage payments for eligible JobKeeper workers cannot be below $1,500 a fortnight for the duration of the scheme.