Compliance Update 2021

Stay up to date with your regulatory responsibilities for payroll and HR with our list of major compliance news and alerts.

The legislative and regulatory changes we list here are from Australian territory, state and federal governments, as well as industry regulators such as the Fair Work Commission, Services Australia and the Australian Taxation Office.

Closure for Workpac vs Rossato The High Court of Australia has handed down a decision in WorkPac Pty Ltd v Robert Rossato & Ors (2021), stating that Robert Rossato (the employee) was a casual employee and therefore NOT entitled to his claimed leave entitlements. The High Court’s decision is consistent with the new definition of ‘casual employees’ found in the Fair Work Act, which came into effect on 26 March 2021.

Casual terms award review 2021 The Fair Work Commission has now completed the first stage of its review of relevant terms in modern awards by revising the ‘casual terms’ for an opening group of six modern awards. These determinations are planned to come into operation on 27 September 2021. Employers should prepare and review all casual employment arrangements in the lead up to these changes.

NSW 2021 Payroll Tax deferral and support payments On 13 July 2021 the NSW government announced a further payroll tax deferral and a new stimulus payment arrangement for all businesses. NSW payroll tax customers now have the option of deferring their payroll tax payments and lodging their 2020/21 annual reconciliation by 7 October 2021. Once the annual reconciliation is lodged, customers also have the option of entering into a Support Payment Arrangement.  In addition, payroll tax customers whose total grouped Australian wages for the 2021/22 financial year are $10 million or less AND who have had a decline in revenue of 30 percent or more, will have their annual tax liability reduced by 25 percent. More information on the reduction and how to establish a Support Payment Arrangement will be provided by the end of August 2021.

Changes to Victoria’s Long Service Leave Act 2018 From 1 July 2021, an employer in Victoria that fails to pay out Long Service Leave on an employee’s last day of work commits a ‘continuing offence’ and can have penalty units applied to them for each day the offence continues, potentially over $10,000 per day, so employers will need to ensure their payroll processes comply with these requirements from the Industrial Relations Legislation Amendment Act 2021

Victorian wage theft laws Victoria’s Wage Theft Act 2020 came into force on 1 July 2021: offences include dishonest withholding of entitlements and the falsification or failure to keep entitlement records. Wage theft offences involve deliberate and dishonest conduct. Honest mistakes made by employers who exercise due diligence in paying wages and entitlements are not considered wage theft.

Superannuation reforms address structural flaws The Treasury Laws Amendment Bill 2021 and the “Your Future, Your Super” reforms have passed into law. One of the new measures, ‘super stapling’ commences on 1 November 2021, and will see employees keep their current superannuation fund when they change jobs unless they nominate to do otherwise. Employers will need to obtain information about new employees’ existing superannuation fund from the ATO, if it is not provided by the employee.

FWC Annual Wage Review increases national minimum wage The Fair Work Commission has handed down its Annual Wage Review decision, resulting in an 2.5% increase to the national minimum wage from 1 July 2021, which will be $772.60 per week; $20.33 per hour.

Due to the continued impacts of COVID-19, some Modern Award increases will be delayed until the first full pay period on or after 1 September 2021 or 1 November 2021. See the decisions and statements for the Annual Wage Review 2020-21 to see which awards will be affected and when.

Temporary assistance for workers affected by state lockdowns From Tuesday, 8 June 2021, Australians who have had their hours of work and income significantly affected due to state lockdowns can claim a temporary COVID-19 Disaster Payment via myGov.  Eligible recipients will receive up to $500 per week for losing 20 hours or more of work and $325 per week for losing under 20 hours. They must not have liquid assets of more than $10,000.

NSW Jobs Plus Act 2021 The Payroll Tax Amendment (Jobs Plus) Bill 2021 (NSW) has passed into law. The changes exempt employers from liability to pay payroll tax on wages that are the subject of Jobs Plus agreements, and extends an exemption in relation to the Aged Care Workforce Retention Grant Opportunity program.

Changes to payroll tax in Victoria from 1 July 2021 The payroll tax reduction contained the Victorian Budget 2021-22 have passed into law. The changes include an increase in the payroll tax threshold from $650,000 to $700,000, and a reduction in the regional employer rate from 2.02% to 1.2125%.

Mental health and wellbeing levy (payroll tax surcharge) in Victoria The Victorian Budget 2021-22 includes a payroll tax surcharge on wages paid in Victoria by businesses with national payrolls over $10 million a year, which has now passed into law. The surcharge is being used to fund mental health and wellbeing support services. The expected start date is 1 January 2022.

Victorian Gender Equality Act 2020 The Victorian Gender Equality Act 2020 was enacted to require the public sector, councils and universities to take positive action towards achieving workplace gender equality and to promote gender equality in their policies, programs and services, based on seven workplace gender equality indicators. The Act also established the Public Sector Gender Equality Commissioner.

Wage subsidy extended for new apprentices and trainees Wage subsidies continue with the extension of the existing 50 per cent wage subsidy program for new apprentices and trainees employed from 5 October 2020 to 31 March 2022. The measure will uncap the number of eligible places and increase the duration of the subsidy to 12 months from the date an apprentice or trainee commences with their employer.

End of minimum salary or wages threshold for SG Pending the legislation passing parliament, the Government is intending to remove the existing $450 per month minimum salary or wages threshold (which resulted in low income employees not receiving any superannuation guarantee support), from 1 July 2022.

Low and middle-income tax offset (LMITO) is retained in 2021-22 The low and middle income tax offset (LMITO) is being retained in 2021-22, and should be worth up to $1,080 for individuals or up to $2,160 for couples.

Victorian Wage Theft Act 2020 The Victorian Wage Theft Act is scheduled to come into force on 1 July 2021, now it has received Royal Assent. Wage theft offences in the Act include: dishonest withholding of employee entitlements; falsification of employee entitlement records; failure to keep employee entitlement records. These offences are not intended to capture honest mistakes and those employers who have exercised due diligence in paying employee entitlements.

Junior Pay Rate Decision, General Retail Industry Award 2020 From 1 May 2021, workers under the age of 21 on level 4 or above of the Retail award will be given the same rate of pay as an adult. See the final decision.

Legislated superannuation increase from 9.5% to 10% The Superannuation Guarantee is set to increase on July 1 from 9.5% to 10%. At this stage there have been no official announcements to postpone the increase, including from the 2021–2022 federal budget. Visit the ATO website the see the table of Super guarantee percentages.

Updated super rates and thresholds Several super rates and thresholds have been updated, including Lump Sum D and ETP thresholds, the Maximum Contribution Base (BSE), the superannuation percentage and caps for super contributions and transfer balances. These changes are effective from 1 July 2021.

FBT rates updated for the new FBT year from 1 April 2021 The ATO has published the updated FBT rates for items such as the car parking threshold and reasonable food and drink amounts for employees living away from home (LAFHA).

Fair Work Amendment Bill 2020 – changes to casual employment The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (the FW Bill) has become law with just a new definition of casual employment surviving unscathed. The bulk of proposed reforms in enterprise bargaining, award simplification and wage theft have been shelved for now. FairWork has published the details of the changes to casual employment.

Superannuation reforms: super ‘stapling’ reminder Under the “Your Future, Your Super” reforms, employees will keep their current superannuation fund when they change jobs unless they nominate to do otherwise. Although the Treasury Laws Amendment (Your Future, Your Super) Bill 2021 has not yet been passed into law, it is expected to be enacted this year.

The first phase of the reforms will commence on 1 July 2021, from which date employers will obtain information about new employee’s existing superannuation fund from the ATO, if it is not provided by the employee.

JobKeeper payroll tax exemption in NSW The NSW Commissioner of State Revenue has clarified the extent to which an exemption from payroll tax applies to the JobKeeper payment.

NZ tax rate increase The New Zealand Inland Revenue Department have introduced a new tax rate effective from 1 April 2021: a top tax rate of 39% applies to annual earnings above $180,000 per annum.

Payroll tax exemptions for ACT businesses The ACT government has announced in its 2020-21 budget that it will extend payroll tax exemptions and waivers for ACT businesses as part of its coronavirus pandemic recovery plans.

Businesses with payroll under $10 million who are in hardship will have interest-free deferrals of payroll tax extended until June 30. Payroll tax exemptions for wages paid to new apprentices or trainees, who were employed after August 1 last year, will also be extended until June 30.

New payroll tax rebates to support Tasmania’s COVID-19 economy The Tasmanian government has announced various payroll tax rebates for trainees and apprentices, and youth employees.

WA payroll tax exemption for new apprenticeships The Western Australian Government has exempted Western Australian businesses from paying payroll tax on wage subsidies as announced in the 2020-21 Commonwealth Government Budget.

Revised STP Phase 2 mandatory start date The ATO has extended the proposed mandatory start date for Single Touch Payroll Phase 2 by 6 months to 1 January 2022, in response to industry feedback. From 2022, STP reporting will include a breakdown of gross income and allowances, and more employment data. If a payroll software provider or employer may not be able to meet this deadline, a deferral framework will provide a process for an application for a deferral to be made.

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