Six million Aussies have been touted to benefit from the $1,500 per fortnight JobKeeper Payment, but a ‘concerning’ loophole could leave them out of pocket.
Shadow industrial relations minister, Tony Burke, said on Thursday that employees could be forced to exhaust their leave entitlements while receiving the wage subsidy.
“If you’re stood down, it’s already the case that employers can say you’ve got to use up your leave first, and they start running down your leave,” Burke told a lunchtime briefing.
“What it looks like will be possible is: if the employer gets the wage subsidy, instead of passing it through to you as a wage, they collect it and still have you running down your leave entitlements.
“So effectively, instead of the government subsidising someone’s wage, they’re subsidising the balance sheet for an employer while the employer simply runs down all the leave entitlements of their employees.”
Burke said though this was “technical”, there could be thousands of permanent workers who will be left without leave entitlements.
Also read: Who the $1,500 wage subsidies left behind
Business owners back away
Business owners who were considering the JobKeeper Payment are reportedly having second thoughts despite previously registering their interest with the tax office, the Council of Small Businesses of Australia (COSBOA) has revealed.
Businesses are reportedly not “confident” they have the flexibility to change hours, scope of work, and undertake necessary stand-downs of staff, without the risk of future punishment by union or class action, according to COSBOA CEO Peter Strong.
On top of that, he added the upfront cost of paying out staff before being reimbursed from the ATO has left business owners “concerned”.
“Under the JobKeeper process, businesses are required to first pay employees the JobKeeper funds and then be reimbursed at the end of each month from the ATO,” Strong said.
“This substantial up-front cost, combined with uncertainty about key workplace provisions, may lead business owners to simply close their business, retrench their staff, and join the JobSeeker queue at Centrelink instead of running the risk of legal uncertainty.”
Is it law yet?
Businesses have been advised to “proceed with caution” when registering for the wage subsidy, as it hasn’t actually passed parliament yet, workplace consulting firm Employsure said.
"This is not law yet. I’m not saying it’s not going to be – the federal government seems confident in it,” said Employsure managing director, Ed Mallett.
“But there are plenty of questions that should be asked before it passes through parliament.”
Mallett said without clarity around how the subsidy applies to casual workers or employees with accrued leave, businesses should adopt a ‘wait and see’ attitude.
“Explain to your employees that you’re trying to understand the finer details of the payment plan,” Mallett said.
“Don’t rush into it and start paying extra money out of your pockets. Stay in cash preservation mode, see how this lands once it passes.
“You don’t know for sure that you’re going to get that money yet. Either because it won’t come into law in the format that has been proposed, or because your specific business and revenue can’t make the best of the payment as it’s set out.”
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