While the new financial year doesn’t call for resolutions, it is an excellent time to check in and ensure your business is compliant with the myriad of regulatory changes in 2019/20.
Increase to the National Minimum Wage and Modern Award rates
On 30 May 2019, the Fair Work Commission handed down its decision on the Annual Wage Review, deciding to award an increase to minimum wages of 3%. This will take effect from the first pay period commencing on or after 1 July 2019.
While higher than advocated for by the NRA, the outcome is nearer our advocated position than the ACTU’s proposed 6% increase. Although noting that the economy had slowed since its heights in early 2018, the Commission nevertheless determined that economic indicators remained strong enough to support such an increase.
While lower than the increase awarded in 2017 and 2018, this is still above CPI, and certainly above the group CPI for retail goods, so we may see retail businesses struggling to accommodate this increase.
Wage summary documents are available in our member portal. Click here to download the rates relevant to your business.
Changes to penalty rates
Further changes to Sunday penalty rates will be effective from 1 July 2019. This will be the last scheduled change to Sunday rates for all employees under the Fast Food Industry Award 2010, and the last for casual employees under the General Retail Industry Award 2010 (GRIA).
Changes applicable from the first pay period commencing on or after 1 July are as follows:
|Award||Type of employee||Applicable Sunday rate|
|General Retail Industry Award||Full time and part time||165%|
|Fast Food Industry Award||Full time and part time||125%|
A further reduction will be implemented for full time and part time employees under GRIA in July 2020.
Although the reduction to Sunday penalty rates are reaching their conclusion, the graduated increases to Saturday and evening penalty rates for casual employees will continue until 2021.
Single Touch Payroll
Single Touch Payroll (STP) is a new way of reporting tax to the Australian Taxation Office (ATO). There is no longer a requirement to provide employees with a Payment Summary where STP has been introduced. Instead, another document called an ‘Income Statement’ will be available to employees directly from the ATO from 31 July 2019 via their online myGov account or registered tax agent.
Employers with 19 or less employees are requested to commence reporting through STP as soon as practicable after 1 July 2019 but no later than 30 September 2019. Importantly, once you start reporting through STP, you must continue doing so in each pay cycle.
Businesses with existing bespoke payroll software should contact their provider about the STP options they offer. For employers with less resources, the ATO has partnered with software providers to implement no-cost and low-cost STP solutions. These can be found here.
Employers with 20 or more employees should already be reporting through STP. If your business has less than four employees, additional options, such as ATO assistance, may be available to you.
Increase to high income threshold for unfair dismissals
The high income threshold (HIT) limits employee’s eligibility for protection from unfair dismissal under the Fair Work Act, and is adjusted annually. The HIT will be increased from $145,400 to $148,700 from 1 July.
This will have implications for who may claim unfair dismissal, and the maximum amount of compensation they may receive. As compensation is capped at the lesser of 26 weeks’ pay or half the amount of the HIT, the increase to the HIT means the maximum amount a person can claim for unfair dismissal has also increased from $72,700 to $74, 350.
Increase to filing fees and penalty units
The Fair Work Commission increases filing fees annually, effective from 1 July of each year. The filing fee for dismissal, unlawful termination, general protections and anti-bullying applications made under sections 395, 775, 373 and 789C of the Fair Work Act 2009 will increase to $73.20 (up from $71.90) from 1 July 2019.
Similarly, penalty units imposed by state and federal legislation may be increased annually. Penalty units are a prescribed amount of money used to calculate fines. Some offences under the Fair Work Act and work health and safety laws attract a penalty expressed in penalty units.
While penalty units under federal law will not be increasing in the new financial year, the following states will be implementing an increase:
|State||Unit prior to 1 July 2019||Unit from 1 July 2019|
New Fair Work Information Statement
A revised form of the Fair Work Information Statement is currently in consultation, and is expected to be formalised from 1 July 2019.
The Fair Work Information Statement must be provided to employees before, or as soon as practicable after they commence employment.
Changes to right of entry permits
From 1 July 2019, right of entry permits issued by the Fair Work Commission must include a photo and signature of the permit holder pursuant to the Fair Work Amendment (Modernising Right of Entry) Regulations 2019 registered by the Government earlier this year.
A significant difference (in addition to the photo and signature) is the addition of a “QR Code”, which when scanned (e.g. using an application on a smart phone) will direct to the current list of permit holders which appears on the Fair Work Commission’s website, thereby enabling the business to confirm the entry permit is still current.
Existing permit holders can continue to use their old permits. From 1 October 2019, however, they will be required to present a current or recently expired Government-issued photo ID alongside their permit.
Limitation on cash transactions
The 2018-19 Federal Budget proposed a limit on cash transactions of $10,000 or more, effective 1 July 2019. The NRA has since been advised by Treasury that the implementation of this limit will be delayed until 1 January 2020.
This is an anti-money laundering measure which was introduced off the back of recommendations from the Government’s Black Economy Task Force. This prohibition is likely to have the greatest effect on luxury retailers, retailers with high numbers of tourist customers, and furniture retailers.
In anticipation for January, businesses likely to be affected by this change should establish policies and procedures to allow them to advise customers of the restriction, and to create strategies for communicating these to customers.
We will continue to keep retailers informed of any changes as they arise.
If you have any concerns about how the above changes will impact your business, call 1800 RETAIL (738245) to speak with one of our workplace relations advisors.