Single Touch Payroll – ATO discussion paper

The ATO has issued a discussion paper on the proposed introduction of single touch payroll for employers from 1 July 2016. Under Single Touch Payroll, employers will be required to electronically report payroll and superannuation information to the Tax Office when employees are paid using Standard Business Reporting-enabled software.

In addition, Single Touch Payroll will streamline tax file number (TFN) declarations and Super Choice forms by providing a digital channel to simplify the process of bringing on new employees. Single Touch Payroll will be available from July 2016.

To meet their obligations employers would be required to use appropriate payroll software. The discussion paper seeks views on transitional issues, suggestions on how to minimise compliance costs and the potential for employers to remit employee Pay As You Go Withholding and the Superannuation Guarantee Charge contributions at the same time employees are paid.

In a nutshell, you won’t have to fill in the wages section on your BAS but you may have to send the tax withheld from wages to the ATO every week when you do the wages instead of every quarter when you do your BAS.

Recent Changes to the Fair Work Laws

The Commonwealth Government has recently made a number of significant changes to Australia’s employment laws. These changes took effect on 1 July.

While much attention has been given to the recent increase to the compulsory superannuation guarantee, little has been given to a number of equally important changes to your clients’ legal obligations under the Fair Work Act 2009. Penalties of up to $51,000 per breach apply, so it’s vital employers take the time to understand these changes and ensure compliance.

1. Flexible Working
Since 1 January 2010, employees covered by the Fair Work Act 2009 and who have worked for an emplyer for at least 12 months and who are responsible for the care of a child under school (or a disabled child aged under 18) have had the legal right to formally request ‘flexible working’. In effect, this means they have had the right to ask, in writing, for their emplyer to consider changes to the way work is performed. For example, an eligible employee could request they occasionally work from home, change their working hours or the days on which they work.

Once a formal, written request is received, the employer has 21 days in which to consider it and to respond in writing confirming either their acceptance or refusal. If the request is being refused, the employer has an obligation to explain the ‘reasonable business ground(s)’ supporting their refusal.

The changes now made to the Fair Work Act 2009 have dramatically increased the pool of employees who are eligible to make formal requests for flexible working. According to the relevant Minister, The Hon Bill Shorten, ‘millions’ of Australian employees now have the right to request flexible working for the very first time. The expanded group of eligible employees now includes those who meet any of the following criteria

  • parents or carers of children of school age or younger
  • carers of others
  • employees with disabilities
  • persons aged over 55
  • people experiencing family violence

If you receive a written request from an eligible employee you must still respond in writing within 21 days and either accept or reject the application. The updated legislation now includes a (non-exhaustive) list of the various grounds you could rely upon if rejecting the request.

These include:

  • the requested changes would be too expensive
  • you can’t change the working arrangements of other employees to meet the employee’s request
  • it’s impractical to change current working arrangements or to hire new staff to meet the employee’s request
  • the changes would likely lead to significant losses in productivity or efficiency, and
  • the changes would likely have a significant negative impact on customer service.

You should note that these are certainly not the only reasons they can point to when rejecting an employee’s request. Further, they should also keep in mind that only employees who meet the above criteria and who have been employed for at least 12 months have the right to make formal requests.

2. Parental Leave
Significant changes have also been made to unpaid parental leave entitlements and, once again, heavy penalties may be imposed against employers if they don’t meet their new obligations.

As of 1 July, members of eligible ’employee couples’ can now take up to 8 weeks of concurrent unpaid leave – a significant increase from the previous 3 week limit. In addition, this concurrent leave no longer needs be taken in one single period or commence immediately following the date of birth or placement.

Employees with less than 12 months’ service are now also eligible to request a transfer to a safe job during their pregnancy and, if no safe job exists at the time, your client will become obligated to provide the employee with access to unpaid parental leave. In practice, this may present a number of difficulties for your clients, especially those running small businesses.

3. Other Changes
Amendments have also been made to employers’ obligations to consult with employees regarding changes to rosters, union right of entry and time limits for ‘unlawful termination’ applications. Expert advice should be sought if you find youself dealing with any of these situations.

Finally, new laws relating to workplace bullying will also take effect on 1 January 2014. These will also have a significant impact.

Sham contracting findings released

The Fair Work Ombudsman  has released the findings of our audit into sham contracting in the cleaning services, hair and beauty and call centre industries.

Sham contracting occurs when an employer attempts to disguise an employment relationship as an independent contracting relationship, thereby avoiding obligatory rates of pay and other entitlements. This gives the employer an unfair competitive advantage.

The operational intervention began in April in response to intelligence from various sources and concerns raised by key stakeholders, including employee and employer groups and members of parliament.

The report states that a number of trading enterprises engaged contractors who should more properly have been classified as employees.

While Fair Work inspectors found that most of these arrangements were not deliberate, they did identify a number of employers whom they believe knowingly or recklessly misrepresented the employment relationship to their workers as one of independent contracting.

Legal action is being considered in some instances.

The Fair Work Ombudsman found misclassification of employees in each of the three industries that were investigated, but does not believe the problem is confined to these industries alone. 

Misclassification can lead to a contravention of the National Employment Standards (NES), minimum wage orders and terms of a Modern Award or Enterprise Agreement.

It can also result in contraventions of employer obligations to provide employee records and pay slips and may expose employers to back-payment of outstanding entitlements.

The report calls for employers to exercise a greater degree of care over their contracted labour arrangements.

A number of employers had received advice from accountants on how to structure their operations. It appeared the legality or appropriateness of the arrangements under relevant workplace laws was often not considered.