Employers with superannuation skeletons in their closet are being urged to come forward and take advantage of a new amnesty scheme or risk tough penalties in future.
And some members of the small business community have questioned whether a similar scheme is needed to address the growing problem of wage underpayments in some Australian industries.
After almost two-years of political posturing, the controversial Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 passed through the Senate yesterday, green-lighting the Australian Taxation Office to accept confessions of superannuation underpayments without applying penalties.
Under the program employers can fess up to historical underpayment of superannuation guarantee payments and escape penalties as long as they repay outstanding entitlements to workers with interest.
But businesses will only have six months from the date the Governor-General signs off on the law to take advantage. Once this time has passed, businesses will risk being caught out by tougher penalties expected to be introduced by the Morrison Government over the next 12 months.
Tony Greco, general manager of technical policy for the Institute of Public Accountants, says firms that have underpaid workers entitlements should come forward.
“If you don’t come forward, you’ll get hit over the head — I know which place I’d rather be,” Greco tells SmartCompany.
Assistant Minister for Superannuation Jane Hume said the Morrison Government expects at least $160 million in unpaid super to be repaid under the scheme.
“Since the one-off amnesty was originally announced back in 2018, over 7,000 employers have already come forward to voluntarily disclose historical unpaid super,” Hume said in a statement on Monday.
“We estimate an additional 7,000 employers will come forward in the next six months before the amnesty ends.”
Those who don’t come forward will be slapped with higher penalties when they’re caught, Hume said.
This ranges from a 100% minimum financial penalty on top of an employer’s superannuation shortfall, to as much as 200% of that amount.
Additionally, the ATO will still be conducting its regular audit activity during the amnesty, meaning employers that don’t come forward during the six month period could still be slapped with penalties.
The amnesty has stident critics, including the Australian Council of Trade Unions (ACTU), which said Monday the program is a “blanket pardoning of a serious contravention of federal law”.
“We are living through a national crisis of wage theft and superannuation forms a significant part of this issue,” ACTU president Michele O’Neil said.
“Instead of punishing the employers who have been stealing money from their employees, potentially for decades, the Morrison Government has waved them through without any penalty whatsoever.”
Wage theft amnesty?
The passage of the amnesty program for superannuation has led some to ask whether a similar scheme could be utilised to address widespread wage underpayment in the retail and hospitality sectors.
Ben Renshaw, a tax and employment partner at BDO, told SmartCompany last week an amnesty should be at least considered.
“Given the breadth and depth of the problem we could all take a step back and say, well Fair Work needs some time, employers need some time, and the government needs some time to resolve this,” he said.
“Maybe an amnesty gives everyone the time and opportunity to do things a bit more thoroughly.”
Greco says a wage theft amnesty would be politically contentious, perhaps more so than the superannuation amnesty.
“The issue is, with superannuation the gatekeeper is the ATO. If it’s underpayments, it’s Fair Work,” Greco says.
“They’re a bit more black and white.
“You’re going to have a lot of resistance from unions and the ALP,” Greco says.