The JobKeeper Package Unpacked

17 April 2020

From Monday 20 April 2020, businesses can enrol for the JobKeeper scheme to help retain staff during the downturn caused by COVID-19. The following update provides answers to frequently asked questions for architectural practices.

The ACA published information on the JobKeeper Package soon after it was announced on 30 March 2020 by the Federal Government. This financial subsidy offers desperately needed relief to businesses to enable them to retain employees, assisting a significant proportion of architectural practices with the retention of staff.

We continue our updates with information to frequently asked questions from architectural practices.

What is the JobKeeper scheme?

The JobKeeper scheme will help eligible/qualifying employers to retain staff during the downturn caused by the Coronavirus pandemic and support business recovery when conditions improve.

These changes are operational and will be repealed on 28 September 2020.

To check eligibility for JobKeeper, please speak with your accountant or financial adviser.

What are the JobKeeper payments?

Employers that qualify for the scheme are entitled to a maximum of 13 fortnights’ worth of payments, which will be made to each eligible employee retained by the employer on 1 March 2020.

The Federal Government will pay eligible employers $1500 per fortnight for each eligible employee (fortnightly in arrears).

Payments should commence from the first week of May and will be backdated to 30 March 2020.

The ongoing payments will be made monthly in arrears.

What are the changes to the Fair Work Act?

Changes to the Fair Work Act 2009 will temporarily enable employers who qualify for the JobKeeper allowance to have increased flexibility around employees’ hours of work. This flexibility will enable stand down direction, performance of duties within the employees’ scope, capabilities and location of work.

There will also be changes to increased flexibility of annual leave (expires 30 June 2020) including days and times at work.

When implementing the above changes, employers are bound by the following obligations:

  • an employer must consult the employee (or a representative of the employee) before giving a direction
  • directions must (among other things) not be unreasonable in all of the circumstances
  • directions in relation to duties to be performed by an employee or their location of work, must be supported by an employer’s reasonable belief this is necessary for the continued employment of one or more employees of the employer

What are the stand down provisions under JobKeeper?

Stand Down provisions under the JobKeeper scheme vary from normal stand down provisions of the Fair Work Act 2009. The new provisions enable a qualifying employer to direct the relevant employee in certain circumstances. These directions are called ‘JobKeeper enabling stand down directions’ and apply on the following conditions:

  • The employee cannot be usefully employed for their normal days or hours during the JobKeeper enabling stand down period because of changes to business attributable to the Coronavirus pandemic; or government initiatives to slow Coronavirus transmission
  • These changes must be implemented safely, having regard (without limitation) to the nature and spread of Coronavirus.
  • Changes to business could include, for example, less clients and the closing of offices. (This one is significant as previously you could not stand down due to a downturn in business).
  • With JobKeeper consultation and changes, employees only need three days’ notice for the changes to their terms and conditions to take place and ensure a written record is kept of the consultation and direction.
  • An employee on JobKeeper stand down is paid the minimum of $1500 per fortnight (employees are not paid in a normal stand down)
  • Stand down under JobKeeper can be from reduced hours to nil hours worked

Under the Fair Work Act, the Fair Work Commission has the power to hear disputes and make orders about the new JobKeeper provisions. For more information visit the Fair Work Ombudsman website.

What are employers’ payment obligations under JobKeeper?

Employers’ obligations in meeting the JobKeeper payment to employees are as follows:

  • ensuring payments are made fortnightly
  • ensuring that if the employee has performed hours in excess of the JobKeeper payment, they must be remunerated accordingly
  • If an employee is stood down as part of the JobKeeper stand down provisions, employers cannot reduce the employee’s hourly rate of pay they were receiving prior to accessing the JobKeeper payment

What if my employee is on paid leave during the JobKeeper period?

A JobKeeper enabling stand down direction does not apply while an employee is taking paid or unpaid leave authorised by the employer (for example, annual leave), or is otherwise authorised to be absent (for example, on a public holiday).

How does leave accumulate during the JobKeeper period?

An employee who is subject to a JobKeeper enabling stand down direction accrues leave entitlements as if the direction had not been given.

Any entitlements to redundancy pay and payment in lieu of notice of termination are also to be calculated as if the direction had not been given. Normal leave accruals apply.

Is superannuation payable?

Where an employee is paid more than $1,500 per fortnight, the employer’s superannuation obligations will not change. Where an employee is having their wages topped up to $1,500 per fortnight because of the JobKeeper Payment, superannuation payment on any additional wages paid by the JobKeeper Payment will be at the discretion of the employer.

Where to from here?

Register for the JobKeeper Payment (Commonwealth Government via ATO) at www.ato.gov.au/Job-keeper-payment.