COVID-19: JOBKEEPER SERIES | Part 02
PART 2 - BUSINESS PAYMENTS
The Government’s JobKeeper wage subsidy programme, while still applauded for keeping the essential connection between businesses and their labour force, has flaws that are becoming more evident as time progresses - only to be expected in a scheme that was hastily put together due to time pressures and will take some negotiating by employers.
This blog focuses on Part 2 – Business payments and eligible employees.
Business payments from the ATO
As per our News on this previous topic (click here), a large draw-back for businesses who do have eligible JobKeeper employees is the delay in payments from the ATO. For example, those who applied by 30th April 2020, will be eligible for payments 1st week of May, for payments dating back to 30th March – a whole 5 to 6 weeks later. While large businesses with cash reserves may better be able to withstand this delay, small- to medium-sized businesses are less nimble and are prone to cashflow issues.
The Federal Government has referenced temporary loans from banks to bridge this gap for the short-term. This is not ideal given the paperwork, financial information and time spent in a period when business owners and their leaders need to be focussing on their businesses and how to innovate in this new environment.
JobKeeper payments from the ATO will continue monthly in arrears – even for employers who pay their employees weekly or fortnightly. Managers & business owners need to carefully plan out their cashflow to meet expectations.
Eligible employees
A further issue is that while a business may have submitted an “eligible employee” list to the ATO when finalising their JobKeeper application, there is no guarantee that all the employees on that list will be accepted by the ATO as eligible for the $1500 per fortnight subsidy.
Businesses should do due diligence to manage this appropriately but are also guided by what employees declare in terms of residency, immigration, and secondary employment.
A business may have re-instated an employee with the clear expectation that this employee will receive the JobKeeper wage subsidy, carrying that wage/salary for a month until the ATO payment occurs. However, there will be instances where employees are rejected for eligibility, and with this delay in notification to the employer, the business has carried a wage they can ill afford.
This then raises the question of – what now for that employee? The employer still needs to consult and go through Fair Work mechanisms if they choose to then exit the employee via restructuring.
Inequities of JobKeeper payments
HR Unplugged has heard a number of stories from employees and employers alike about the “unfairness” of the JobKeeper wage subsidy scheme:
A casual who works 5 hrs a fortnight gets the full $1500 per fortnight wage subsidy, while they earn significantly less than this during normal circumstances. This is a dire inequity and a waste of the Government’s money.
Multiple employers: a part-time permanent employee who works 5 hrs a week in Company A that is not impacted by the downturn, but loses her normal 20 hrs a week casual employment in Company B that is impacted, cannot be eligible for the $1500 per fortnight subsidy due to the permanent work in a business that is not impacted. This again highlights the impact of casualisation of our workforce, where the bulk of this person’s income comes from casual employment but the wage subsidy is unfairly impacted by permanent employment.
The Government is listening though, closing the worst of the loopholes as recently seen with the change in eligibility of full-time 16 & 17 yr old students.
Overall, we remain a supporter of the JobKeeper scheme – while hastily cobbled together, it is better than nothing although the timing of the first payment has severely hurt businesses and individuals.