Jobkeeper wage subsidy – how you can use the subsidy to engage your employees and build your business
Jobkeeper applications opened with the ATO today, 20 April 2020. Those employers who are approved for the wage subsidy will have many options available to them in terms of how they utilise existing staff and how they bring back staff who have previously been stood down or made redundant.
The purpose of the Jobkeeper wage subsidy is to keep employees engaged with their employer, and where possible, return employees to useful employment. This does not mean that they will necessarily come back to their previous job, but it does mean that they will be able to add value to the employer, at least part-time.
Employers may, following consultation with employees, issue a Jobkeeper enabling direction that they undertake alternative duties. These duties must be:
- Useful employment;
- Within the skills and experience of the employee;
- Within the scope of the employer’s business;
- Safe (e.g. must allow for social distancing).
If a task requires a license or formal qualification, then these tasks can only be allocated to employees who have such a license or qualification.
Employers now need to think strategically, innovatively and creatively about what alternative duties they have available which fit the above criteria and can be assigned to employees. In doing so, we recommend that employers think of the future and what is needed to allow the business to be ready following the COVID-19 down turn. We suggest employers consider the following:
- What do we need to put in place to ensure we are ready to reopen or increase capacity? For example – Is maintenance up to date? Is workflow in need of review? Is there training that needs to be completed?
- Are there projects that need to be completed that we have not had time to do before?
- Are there training and development opportunities to upskill staff?
- Are there operational tasks that can be completed? For example – Do you have a backlog of scanning or filing? Can company policies be updated or work instructions improved?
- Is the website the best it can be?
- Are there opportunities to improve the use of technology?
All of the above are the types of alternative duties which employees who are in receipt of the Jobkeeper payment can be asked to complete. They are all useful and reasonable employment tasks, provided employers are conscious of the skills and experience of their employees.
Many employers will not have the cashflow to currently “top up” the Jobkeeper subsidy to equal full-time rates or part-time rates for their staff. This is not necessary. Employees who are receiving the wage subsidy can work the number of hours which are equivalent to the Jobkeeper payment based on their previous hourly rate without the employer needing to provide any top up. However, where employees undertake actual work, they must be paid superannuation for those hours.
Jobkeeper subsidy payment and employment, practical examples
Jimmy is a full-time employee who normally earns $25 per hour. Therefore, cross the fortnight period Jimmy can be required to undertake work for the employer in either his usual job or alternative duties for up to 60 hours. At $25 per hour this would equate to $1,500, all of which is covered by the wage subsidy. Jimmy would be entitled to be paid superannuation on that entire amount.
Sally is a part-time employee who usually works 20 hours per week and is paid $58 per hour. Sally could be asked to work up to 25.8 hours over the fortnight in either her usual role and/or in alternative duties. However, the employer does not have 25.8 hours of work to offer Sally but is able to offer her 20 hours per fortnight. Therefore, Sally could work 20 hours per fortnight equating to $1,160 which is all covered by the wage subsidy. However, she would need to be paid the full $1,500 subsidy for the fortnight under the Jobkeeper rules. Sally would be paid superannuation on the $1,160 but would not be paid superannuation on the remaining $340 wage subsidy per fortnight.
Natalia is a full-time employee who normally works 76 hours per fortnight and earns $32 per hour. Natalia works in a business which can offer her a combination of normal duties and alternative duties for her usual 76 hours. Natalia would continue to receive her usual salary of $2,432 per fortnight. The first $1,500 of this amount would be covered by the wage subsidy and the remaining $932 would be paid by the employer. Natalia would be entitled to superannuation on her entire salary each fortnight.
Mitchell works for a business which has needed to close due to restrictions placed on the industry by Government. Mitchell’s employer does not have alternative duties that he can perform. Therefore, Mitchell is not required to work any hours and he is paid the full $1,500 Jobkeeper wage subsidy. Mitchell is not entitled to any superannuation on this amount.
As can be seen from the above, the Jobkeeper wage subsidy is an opportunity for employers and employees to work together to prepare for the future and we encourage employers to use the wage subsidy to engage their employees in the journey to recovery. There is nothing to be gained by employees being paid to stay home and do nothing if there is useful work that they can be engaged in, even if this is not for their usual hours or doing their usual work.
It is hard to conceive of many businesses which, when applying innovation and creativity, cannot identify genuine opportunities for employees to be part of the work needed to prepare for the resurgence of the business post COVID-19.
If you would like assistance in identifying how your employees can be strategically engaged in your business to maximise the benefits of the Jobkeeper wage subsidy, our team is available to assist you. Contact us on firstname.lastname@example.org or 3218 3919.