Changes to Your HR Obligations for the New Financial Year
The new financial year brings a number of changes to laws and regulations affecting HR, including new obligations for employers. Merilyn Speiser of Catalina Consulting outlines how these will affect your business and what you need to do to stay compliant.
FY2018 brings a whole range of changes to HR. These changes will affect payroll, superannuation, minimum wage, award-based employees and more.
Here’s everything you need to know about what’s happening, as well as what your business needs to do to prepare.
1. 3.3% Minimum wage increase
The 3.3% minimum wage increase kicks in from the first full pay period after 1 July 2017, which means that the national minimum wage will lift to $694.90 per week or $18.29 per hour.
What you need to do: If you have employees whose pay rate is based on a Modern Award or an industrial instrument like a registered agreement, you should review the amount you’re paying them now. If your employees aren’t bound by an Award or instrument, you should double-check that their pay doesn’t slip below the minimum wage, or you could face heavy fines as well as the potential of damaging publicity.
ACA Toolbox: Check the new rates for the Awards relevant to architectural practice.
2. Increase to maximum Superannuation Guarantee contributions
The maximum salary for Superannuation Guarantee (SG) contributions base will increase to $52,760 per quarter, up from $51,620 per quarter.
What you need to do: If you have employees paid an annual base salary of $211,040 or more you should only make a maximum SG contribution of $19,615.60 a year (less than the usual 9.5%)
ACA Toolbox: Check the overview of superannuation changes provided to ACA members by Cbus.
3. The concessional superannuation contributions cap is slashed
From July 2017, individuals can only make concessional (before-tax) super contributions of $25,000 each financial year. In FY2017, the maximum concessional contribution was $35,000 for people over 50 and $30,000 for under-50’s.
If you don’t use it, you don’t lose it: From July 2018 onwards, people who don’t use their annual concessional contributions cap of $25,000 can carry it forward the unused portion for up to 5 years – so long as their total superannuation balance is less than $500,000.
4. The unfair dismissal threshold should rise
From 1 July 2017, the high-income threshold for unfair dismissal claims will likely increase. In FY2017, it went up more than 4% to $138,900 (excluding super). With the minimum wage increasing more than 3% for FY 2018, we’d expect a similar jump here too.
There’s a trap: The high-income threshold doesn’t necessarily exclude everyone earning over the threshold from eligibility to claim unfair dismissal. An employee may still have the right to bring an unfair dismissal claim if they’re entitled to under an Award or EA.
5. Changes to subclass 457 visas
Last financial year the government announced it would be ending the subclass 457 visa. From March 2018, it will be replaced by the Temporary Skill Shortage (TSS) Visa.
This financial year the government will be reviewing the lists of eligible occupations (STSOL and MLTSSL). Anyone applying for a subclass 457 or TSS visa in the future will also need to complete an English language test, unless they’re coming from the UK, Ireland, Canada, the US, or New Zealand.
The government says that early this financial year it will clarify policy settings around its training benchmark requirement. At the moment there are two requirements, which specify the minimum amount employers who rely on 457 Visas must spend on training workers. It will also begin enforcing the rule that visa applicants must hold a penal clearance certificate.
By the end of 2017, the government says it will:
- Begin collecting the TFN of each employer-sponsored migrant, to make sure every employer’s data matches with the ATO’s and that visa holders aren’t being underpaid.
- Start publishing the details of employers who don’t meet their sponsorship obligations.
Not sure where you stand?: If you’re thinking about sponsoring a worker, or if you currently sponsor someone and you’re not sure where these changes leave you, get in touch.
6. Redundancy tax free thresholds
When a staff member’s job is made redundant, they receive a portion of any payment tax-free. This year the base limit rises to $10,155 up from $9,936 in FY2017. On top of that, employees made redundant will receive up to $5,078 of their severance payment tax-free for each year of service, up from $4,969.
If you’re making positions redundant this year: Make sure you take account of the new threshold when making any redundancy payment.
7. Fair Work Ombudsman keeps focus on vulnerable workers
Last year the Fair Work Ombudsman carried out random audits and compliance checks on businesses in industries with a high number of young and migrant employees. With the government’s Fair Work Act Amendment (Protecting Vulnerable Workers Bill) 2017 currently going through its second reading in parliament, expect this trend to continue.
Don’t fall foul of the law: If you employ vulnerable workers make sure you’re paying them all they’re entitled to. Contact us if you’re in doubt about your obligations.
Merilyn Speiser is Principal Consultant at Catalina Consultants. This is an edited version on an article that first appeared on the Catalina Consulting blog, and is republished here with permission.