JobKeeper Scheme: Top 12 Employer Frequently Asked Questions
On Wednesday 8 April, the Federal Parliament passed legislation giving effect to the new JobKeeper Payment to support employment in businesses. The Fair Work Act 2009 (Cth) (FW Act) was also temporarily amended to support the scheme’s operation.
Ai Group has answered many questions about the JobKeeper Scheme since its introduction. The following article contains answers to our top 12 frequently asked questions
1. Who is an eligible employer?
Employers will be eligible for the JobKeeper Payment on behalf of their employees if:
- their business has a turnover of less than $1 billion and their turnover has fallen, or is likely to fall by 30 per cent or more;
- their business has a turnover of $1 billion or more (or is part of a consolidated group with turnover of $1 billion or more) and their turnover has fallen, or is likely to fall by 50 per cent or more; and
- the business is not subject to the Major Bank Levy; and
- the business has not declared bankruptcy or is under liquidation.
- An employer can be a self-employed person, a sole trader or structured through a company, partnership or trust.
- The JobKeeper Payment is based on self-assessment. Employers who enrol for the JobKeeper Payment will receive a receipt of enrolment but the ATO will not send any further confirmation of eligibility.
2. Who is an eligible employee?
Most importantly, an eligible employee is someone who is employed by an eligible employer. If employed by an eligible employer, to be eligible for the JobKeeper Payment an employee must be:
working in a full-time or part-time capacity or be a long-term casual (those who have been employed on a regular and systematic basis for at least 12 months as at 1 March 2020). However, long-term casual employees cannot be eligible if they are also employed on a permanent basis by another employer;
be at least 16 years old (except for full-time students who are 17 years old and younger and are not financially independent);
employed by the employer at 1 March 2020 and still be employed;
a resident for Australian tax purposes on 1 March 2020; and
an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) visa holder at 1 March 2020.
In addition to the above, the following workers are also eligible:
- employees who meet other requirements and who are stood down before or after 1 March; or
- have been made redundant or had their positions terminated since 1 March and have been re-employed.
3. How does an organisation enrol for the JobKeeper Scheme?
The scheme starts from 30 March 2020 and to be paid the JobKeeper payment, eligible entities must:
- qualify for the JobKeeper scheme
- have eligible employees
- have notified all employees (other than employees the employer reasonably believes do not satisfy the eligibility requirements) that the employer is receiving or applying to receive the JobKeeper Payment; and provide each employee with a nomination form to complete;
- have received the employee’s agreement to be nominated by the employer
- have paid the eligible employee $1,500 or more for the fortnightly period covered by the scheme;
- have notified the ATO that the organisation wants to participate in the JobKeeper scheme; and
- have provided the ATO information about their business and the details of each eligible employee.
The JobKeeper payment is paid to employers monthly in arrears beginning in May 2020 and will be paid into the nominated bank account as per the organisation’s most recent tax return.
4. Does the employer have to apply for the JobKeeper Payment for all eligible employees or can they pick and choose?
If an employer chooses to participate in the scheme, and eligible employees agree to be nominated by the employer, the employer must ensure that all of these eligible employees are covered by their participation in the scheme. Employers cannot select which individual eligible employee to nominate.
5. We hired a new employee in April. Are they eligible for the JobKeeper Payment?
No, employees who were hired after 1 March 2020 are not eligible for JobKeeper Payments from that employer, because they were not employed by that business on or at 1 March 2020.
6. What are the JobKeeper enabling stand down directions?
An employer who qualifies for the JobKeeper scheme for a particular employee is able to give a JobKeeper enabling stand down direction to the employee, requiring the employee to work for less hours than the employee would ordinarily work (including nil hours).
The direction can only be given if the employee cannot be usefully employed for their normal days or hours during the period because of changes to the business as a result of COVID-19 or government initiatives to slow the spread of the virus.
The direction must be safe and reasonable. A JobKeeper enabling stand down direction has effect despite any inconsistent provisions in an applicable award, enterprise agreement or contract of employment.
The employer must give the employee at least three days (or a lesser period by agreement) written notice of the intention to give a direction and must consult with the employee or their representative and keep a written record of the consultation. Any direction must be in writing (which can be by electronic means).
During the period when the direction applies:
- the employee accrues leave entitlements as if the direction had not been given;
- if the employment of the employee is terminated, any redundancy pay and payment in lieu of notice are to be calculated as if the direction had not been given;
- the direction does not apply to the employee when the employee is taking paid or unpaid leave that is authorised by the employer (e.g. annual leave), or when the employee is otherwise authorised to be absent (e.g. on a public holiday);
- if the employee gives the employer a request to engage in reasonable secondary employment or a request for training or professional development, the employer must consider the request and must not unreasonably refuse the request; and the period counts as service for the purposes of the FW Act.
7. Do employees continue to accrue their leave entitlements if they are eligible to receive JobKeeper Payments?
Yes, an employee who is working and receiving the JobKeeper Payment continues to accrue leave entitlements.
If an employee has been stood down under section 524 of the FW Act or is on a JobKeeper enabling stand down direction (working reduced hours or no hours at all) then they also continue to accrue leave entitlements on the ordinary hours they would have worked.
8. Can an employee take annual leave whilst receiving the JobKeeper Payment?
Yes. Under the FW Act, an employee is entitled to make a request to their employer to take annual leave during a stand down and the employer cannot unreasonably refuse. This process has not changed with the introduction of the JobKeeper scheme.
If an eligible employee takes annual leave when they are receiving the JobKeeper payment, it would come from their annual leave entitlement as normal and the organisation will continue to receive the JobKeeper payments for that employee.
The JobKeeper Payment rules continue to apply so the employee must be paid at least the $1,500 JobKeeper Payment, or the actual wages they are entitled to for that fortnight, whichever is greater.
Superannuation continues to be paid for any annual leave payments.
9. Can an employee on unpaid leave receive the JobKeeper Payment?
Yes, an employee who is on unpaid leave including unpaid parental leave is eligible to receive JobKeeper Payments, provided that they are an eligible employee.
10. Can part-time employees be asked to work more hours to bring their wages up to $750 a week, or $1,500 a fortnight?
An employee can be requested to work more than their contracted part-time hours, but they cannot be directed to work the additional hours.
If they are an eligible employee, they will still be entitled to receive the $1,500 JobKeeper Payment from the ATO. The ATO will pay the money to the employer, and the employer must pass on the payment to the employee in full.
11. What happens with an eligible employee’s JobKeeper Payment if the employee resigns?
If an employee’s employment ends for any reason, including termination due to redundancy or misconduct, they will cease to be an eligible employee of the employer and accordingly will no longer receive the JobKeeper Payment.
The employer must notify the ATO when an eligible employee leaves employment. The employer will stop receiving JobKeeper payments for that person.
12. Is superannuation paid on JobKeeper Payments?
If an employee continues to work, superannuation would be payable on the amount paid to the employee in accordance with the hours worked.
If the employee is eligible for a top up payment from the employer, the employer only needs to pay superannuation on the amount paid to the employee in accordance with hours worked, but not on the top up amount.
If the employee has been completely stood down and is not working, and is receiving the flat $1500 JobKeeper Payment, the employer would not be required to pay superannuation on this amount.
Advice or assistance
Our advisers are ready to answer your questions. For advice on this topic, or any other workplace relations matter, Employment Plus clients who have placed two or more candidates have free access to the Ai Group Workplace Advice Line.
Please call 1300 862 217. We are open Monday to Friday from 8:30am-5:15pm AEST, except for public holidays.
The information contained in this article is based on information available at the time of writing (11 May) and does not constitute legal advice.