Monday 3 July - Creating Confidence In How People Are Paid
National Payroll Day - 21 July 2023
A day to thank Payroll - it makes sense
At Australian Payroll Association , we know Payroll Professionals are committed to getting Australians paid. Most payroll professionals will work extra hours, attend continual training and work through national holidays to ensure Australians are paid correctly and on time.
Many innovations have improved the payroll industry over the past decade. But there is one thing that remains the same.
“Payroll is underestimated by everyone who does not work in it”
That’s why it makes sense to provide the opportunity to recognise the dedicated payroll professionals whose hard work and perseverance continues to keep Australian’s paid.
National Payroll Day is your opportunity to join your profession in recognition of all the hardworking Payroll Professionals around Australia. On?21 July?APA encourages you to mark the occasion by shouting out any great Payroll Professionals in your network and use the hashtag?#APANationalPayrollDay ?to spread the message.
APA encourages employers to get on board and recognise and thank their payroll teams. Take your payroll team to lunch, talk about career progression in the team and write a thoughtful thank you note!
Raise the profile of payroll in your company, click below to download our poster and banner to add it to your email signature.
Important Changes to the Fair Work Act: What Employers Need to Know
The Australian Government has recently introduced new legislation, the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023, which brings about significant changes to the Fair Work Act. These changes aim to protect worker entitlements and improve the rights of employees across the country. It’s important for employers to be aware of these changes and understand how they may impact their payroll processes. In this article, we will discuss three key changes that employers should take note of.
Starting from 1 January 2024, the National Employment Standards will include a right to superannuation contributions. This means that employees, employee organisations, and the Fair Work Ombudsman can enforce unpaid or underpaid superannuation under the Fair Work Act. Employers are already obligated to pay superannuation contributions for eligible employees under existing superannuation guarantee laws. As long as employers fulfill their obligations under these laws, they will not be in contravention of the NES provision. The Australian Taxation Office (ATO) will continue to be responsible for ensuring compliance with employer obligations regarding superannuation guarantee laws.
Effective from 1 July 2023, the Fair Work Act will introduce greater flexibility for employees taking unpaid parental leave. This change aligns with updates made to the Paid Parental Leave scheme. Employees will now be able to take up to 100 days of their 12-month leave entitlement flexibly within the 24-month period after the birth or placement of their child. This is a significant increase from the previous entitlement of 30 days. Pregnant employees will also have the option to access their flexible unpaid parental leave up to 6 weeks before the expected date of birth. Additionally, employees will no longer be restricted to taking a maximum of 8 weeks of unpaid parental leave concurrently with their spouse or de facto partner. Both parents can now take up to 12 months of unpaid parental leave within 24 months of their child’s birth or placement, with the possibility of applying for a 12-month extension beyond the initial leave period.
Commencing on 30 December 2023, employees will have the ability to authorise recurring salary deductions from their employers, even if the deduction amounts vary over time. Previously, a new written authorisation was required each time the deduction amount changed. Under the new legislation, employees can provide a single written authorisation that allows their employer to deduct varying amounts from their salary. The employee retains the right to withdraw this authorisation in writing at any time. It’s important to note that deductions for specific amounts only can still be authorised if they primarily benefit the employee and are provided in writing.
As an employer, it’s crucial to review and update your payroll processes to ensure compliance with these new Fair Work Act changes. Familiarise yourself with the details of the legislation and seek professional advice if needed. By staying informed and implementing the necessary adjustments, you can ensure that your business remains compliant and continues to prioritise the rights and entitlements of your employees.
Age Discrimination & the "retirement age"
It is unlawful in Australia to discriminate against an individual because of their age. Employers are specifically prohibited from discriminating on the basis of age under Federal and State anti-discrimination laws, and a person’s age is also a protected attribute under the general protections provisions of the?FairWork Act 2009?(Cth).
One example of age discrimination often seen in the employment context is the enforcement of a “retirement age” on employees in a workplace, where an employee is essentially forced to retire upon attaining a certain age.
Unless the imposition of an age limit is an inherent requirement of a job, then it will constitute unlawful age discrimination. A recent decision handed down by the Federal Court of Australia (the?Court) on appeal serves as a reminder of the potential consequences of engaging in this discriminatory conduct.
In the matter of?Gutierrez v MUR Shipping Australia Pty Limited?[2023] FCA399, the Court heard an appeal against an initial decision of the Federal Circuit and Family Court of Australia.
The initial decision had found that MUR Shipping Australia Pty Ltd (the?Employer) committed unlawful discrimination against its former Chief Accountant on the basis of his age.
The employee had been employed by the Employer for almost fifteen years before being advised in February 2018 of the Employer’s retirement age requirement. The Employer asked the employee to nominate his retirement date and, when he did, he was advised that his employment would be converted to a fixed-term so that he could train his replacement prior to his retirement.
At first instance, the Employer was ordered to issue an apology and pay general damages to the employee in the amount of $20,000 plus interest. The primary judge declined to make any award of damages for economic loss on the basis that, even though he had been discriminated against, the employee had brought about his own resignation.
Despite a finding in his favour, the employee appealed the decision – in large part contending that the amount of damages awarded to him was manifestly inadequate and did not include damages for economic loss.
The Court agreed with the employee, finding that the primary judge had incorrectly assessed the amount of damages by reference to the seriousness of the Employer’s unlawful conduct towards the employee, instead of asking – what was reasonable compensation for the injuries and disabilities he sustained?
In addition to this, the Court found that the primary judge had incorrectly assessed (or failed to consider at all) the evidence before it. If this had been done correctly, it would have found that the unlawful discrimination committed by the Employer had caused the employee to suffer from an adjustment order (rather than a “mild adjustment order” as initially found) with a subsequent inability to perform full-time work.
The Court assessed the damage sustained by the employee as a “considerable loss of amenity of life, including a diagnosed inability to work, loss of enjoyment of social aspects of his life, and an adjustment order with depression and anxiety”. As a result, the Court revised the amount of general damages – increasing the amount payable to $90,000.
In addition to this, noting the finding that the Employer’s unlawful discrimination had resulted in the employee’s inability to work, the Court considered that an award of damages for economic loss was also warranted. It formed the provisional view that the economic loss sustained was $142,215.56 plus interest (being how much he would have earned up to his proposed retirement date), but invited the parties to provide written submissions.?
Lessons for employers
Forced retirement policies or decisions made to terminate an employee’s employment because they reach a certain age are discriminatory and will, in most cases, be found to be unlawful. As this appeal decision shows, the potential consequences of engaging in such discriminatory conduct can be significant.
Author - Athena Koelmeyer from Workplace Law
Super increase from 1 July 2023
As of July 1, 2023, Australian employers will be required by law to contribute a minimum of 11 percent of a worker’s salary to their superannuation fund, up from the previous rate of 10.5 percent. This rate will continue to rise by 0.5 percent each year until it reaches 12 percent by July 2025.
Industry Super Australia estimates that approximately 8.8 million Australians will experience a boost to their retirement savings, with the average worker benefiting by $330 per year. According to their projections, a typical 30-year-old worker can expect an additional $48,600 in their superannuation account upon retirement under the new regulations.
The primary beneficiaries of this year’s increase will be younger individuals and those with lower incomes, with approximately 60 percent of the workers benefiting earning less than $75,000.
Furthermore, Treasury estimates that this year’s increase, though seemingly modest, will add over $21,500 to the final superannuation balances of recent school leavers who work in low or middle-income positions until the new age pension age of 67.
Women who take extended breaks from their careers to give birth and care for children will see an improvement of at least $17,000 in their retirement savings.
Even older Australians approaching retirement age will experience significant financial gains.
Treasurer Jim Chalmers emphasized that if the Liberal Party had not repealed the superannuation guarantee increases in 2014, Australian workers would have reached the 11 percent threshold in 2017 and 12 percent in 2019.
“We have always supported the superannuation guarantee, which is now increasing to 11 percent,” Chalmers stated. “This means that more hardworking Australians will have more money for their retirement. We believe that every Australian deserves a dignified retirement, and that is why the superannuation guarantee is so important.”
Bernie Dean, the CEO of Industry Super Australia, highlighted that the gradual increase to 12 percent would have a significant impact on workers’ retirement savings, stating that the average 30-year-old worker on the median wage will accumulate an average super balance of $500,000 by retirement.
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“While the incremental increases may seem small, they will result in substantial savings, providing a more secure future for millions of Australians,” Mr. Dean said. “The individuals who will benefit the most from the superannuation guarantee increase are younger workers with lower incomes, as they have many years ahead of them to witness the growth of compound interest.”
Dr. Chalmers took a dig at the Liberals for their attempts to halt the superannuation guarantee increases, expressing doubt about their commitment to “safeguarding the future of super.”
“Labor has been instrumental in building Australia’s superannuation system, and we take pride in it. We will continue working to strengthen it,” he added.
Other changes to superannuation include the expiration of the temporary reduction on minimum super drawdown rates, which was introduced by the Morrison government in response to the Covid-19 pandemic. Retirees who opted for this measure were only required to withdraw 50 percent of the age-based minimums to assist them during the crisis.
Additionally, individuals with more than $3 million in their superannuation accounts will face an additional 15 percent tax on their earnings starting from July 1 next year.
Individual Tax Rates
Latest Payroll Jobs
Job Spotlight
Position Title : Head of Australian Payroll Consulting
The Australian Payroll Group is a leading organisation dedicated to promoting excellence in?payroll practices across Australia. We are currently seeking a highly skilled and experienced?individual to join our team as the Head of Professional Services in our payroll consulting?practice.
Position Overview:
The Australian Payroll Group is seeking a highly skilled and experienced professional to lead?our Australian Payroll Consulting practice. This key leadership role will be responsible for?overseeing the delivery of payroll consulting and advisory services within Australian Payroll?Consulting. The successful candidate should present a strong understanding of Australian?payroll combined with exceptional project management and relationship building capabilities.
View all job - Click Here.
FairWork: Minimum wage increases
The Fair Work Ombudsman is reminding employers that the national minimum wage will increase tomorrow to $23.23 per hour (up from $21.38) or $882.80 per week (up $70.20 from $812.60) based on a 38-hour week for a full-time employee.
This increase applies from an employee’s first full pay period starting on or after tomorrow, 1 July 2023.
On 2 June 2023, the Fair Work Commission?announced ?the increase to the national minimum wage following its?Annual Wage Review .
Casual employees entitled to the national minimum wage must receive a minimum $29.04 per hour, which includes their 25 per cent casual loading.
The Commission also announced that employees covered by awards will have their minimum wage rates increased by 5.75 per cent from the first full pay period starting on or after tomorrow.
Fair Work Ombudsman Sandra Parker said workplaces must ensure all their employees are paid at least the relevant minimum wage, in accordance with the Fair Work Commission’s decision.
“We've updated our free?Pay Calculator ?to help employers and employees calculate the new pay rates.”
“We urge all businesses to use our?Pay Calculator ?to check the lawful minimum rates they need to pay their staff, or to contact us directly for free assistance,” Ms Parker said.
“If workers are unsure which award applies to them, they can use our?Find my award ?tool or contact us for help to find any applicable award.”
“If employers and employees have any questions about pay rates, they can contact the Fair Work Ombudsman for free advice and assistance,” Ms Parker said.
Payroll Training: NEW?COURSE?ALERT!
Understanding the General?Retail?Industry?Award
This specialised?course?is designed to cater to individuals responsible for payroll management under the General?Retail?Industry?Award?2020 (GRIA). By delving into the various components of this modern?award, participants will gain a comprehensive understanding of its impact on payroll.?
Upon completion of the?course, participants will comprehend the intricacies of?award?clauses, distinguishing payment requirements for full-time, part-time, and casual employees. Understanding additional superannuation obligations beyond the SG legislation, as well as the boundaries of an Individual Flexibility Agreement (IFA), will be second nature. Finally, participants will possess the expertise to identify past?award?variations and effectively utilise the tools provided by the Fair Work Ombudsman.
Payroll: Did you know?
Annual leave on termination