On 28 September 2020, a number of changes to the JobKeeper scheme came into effect. JobKeeper is a wage supplement that is paid by the Federal Government directly to employers who then have an obligation to pass that supplement onto the employee. Employers need to demonstrate that they have had or anticipate to have a drop in revenue (usually 30%, but that can vary depending on the type of body) to qualify for JobKeeper.
The original JobKeeper scheme was set up hastily in response to forced closures of businesses to deal with the coronavirus pandemic. Employers who qualified for the scheme had a wage supplement of $1,500 per fortnight paid to them per eligible employee. Eligible employees were full-time, part-time and regular and systemic casual employees who had been employed for one (1) year or more, and who were employed at 1 March 2020.
The effect of the JobKeeper scheme, was that businesses that qualified would have eligible employees wage subsidised no matter whether the employee was stood down, on reduced hours or working their normal hours. Importantly, the original JobKeeper had a ‘one-sized fits all’ approach, where every eligible employee’s wage was subsidised to the value of $1,500 per fortnight. This occasionally resulted in employees who had never actually earned $1,500 being paid $1,500 per fortnight as a result of the JobKeeper scheme. Importantly, if employees worked hours that entitled them to be paid more than $1,500 under a contract of employment, modern award, or enterprise agreement, the employer had to pay them the correct rate of pay pursuant to the relevant agreement.
The JobKeeper scheme also enables employers to change the terms and conditions of an employee’s employment in ways that they were not able to before the JobKeeper scheme. For example, employers were able to stand-down employees with more certainty and clarity than they would have but for the JobKeeper scheme. Employers could also direct employers to take leave in certain circumstances and direct employees to perform work that was different from their employment prior to the JobKeeper scheme. These are known as ‘JobKeeper enabling directions’ and most of these will stay in place with the new JobKeeper. It’s important to note that a JobKeeper enabling direction must be ‘reasonable’ and can be challenged in the Fair Work Commission.
The changes to JobKeeper predominately amend the amount of the wage subsidy that will be provided to the employer for eligible employees. There is no longer a “one-sized fits all” approach. Instead, the following rates will apply:
From 29 September 2020 to 3 January 2021:
- $1,200 payment per fortnight for all eligible employees whose normal working hours are 20 hours or more per week; and
- $750 payment per fortnight for employees whose normal working hours are less than 20 hours per week.
From 4 January 2021 until 28 March 2021, the payment rates will be further decreased to:
- $1,000 payment per fortnight for employees whose normal working hours are 20 hours or more per week; and
- $650 payment per fortnight for employees whose normal working hours are less than 20 hours per week.
In determining an employee’s ‘normal working hours’ an employer must look at the average hours the employee worked in the four (4) weeks prior to 1 March 2020.
It is important for employees to be aware that this may result in a change in their rates of pay. For example, a full-time employee who is stood down and receiving the only the JobKeeper supplement of $1,500 per fortnight from their employer can now expect to receive $1,200 per fortnight (less any tax). For employees who worked less than 20 hours per week prior to 1 March 2020, they can expect a significant change per fornight; from $1,500 to $750.
Employees should understand that their employer may not continue to receive JobKeeper after 28 September 2020. There are more stringent tests in place for employer’s eligibility. If your employer is no longer receiving JobKeeper, then JobKeeper enabled directions and stand-downs may no longer be lawful and you employer will no longer be receiving a wage subsidy in relation to your employment. Further, employers will no longer be able to direct employees to take annual leave under the new JobKeeper scheme.
Finally, employees should be keep in mind that certain employers, known as ‘legacy employers’ will be able to make JobKeeper enabled directions in relation to stand down and conditions of work, if they meet certain criteria. What this means, is that your employer may not receive the wage subsidy, but may still be able to change your employment in ways it could not lawfully do prior to the JobKeeper scheme.
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