Jobkeeper important update – new employees allowed
A legislative instrument was registered on Friday amending the JobKeeper rules to allow businesses to claim the subsidy in respect of new employees by extending the employee test date to 1 July 2020.
There are strict deadlines for providing notifications under the amended rules, this means that employers that are currently accessing JobKeeper payments need to review the impact of these amendments immediately.
Which employees are now eligible?
From 3 August 2020, the testing date for eligible employees has been extended to 1 July 2020 (previously this was 1 March 2020). This extends the application of JobKeeper to employees that have been engaged by an employer since the scheme was originally introduced.
Employees who are already receiving the payment based on their eligibility at 1 March 2020 remain eligible and do not need to retest their eligibility.
An individual can be eligible for JobKeeper if, on 1 July 2020, the individual meets all three of the following conditions:
- employed (as a permanent or long-term casual) by the business;
- 18 years or older (or if they were 16 or 17, they were independent or not studying full time on 1 July 2020); and
- met the residency test.
If an employee was employed on 1 March 2020 but didn’t satisfy any of the conditions above, but did satisfy those conditions on 1 July 2020, it is possible that those employees could now be eligible for JobKeeper payments. For example, at 1 March 2020 a casual worker may have had 10 months with an employer so was ineligible. However by 1 July 2020 it is 14 months so they satisfy the 12 month (permanent casual test).
Another very positive change relates to the ability for an employee to re-nominate with a new employer (which was previously not allowed). Broadly, if an individual was a 1 March 2020 employee of another entity but is not employed by that entity at any time from the start of 1 July 2020, then the individual is now permitted to give a nomination notice to a new employer. The same applies for eligible business participants, as applicable.
What do I need to do now?
The JobKeeper scheme operates on a ‘one-in all-in’ basis, meaning that employers do not have a choice as to which employees they nominate for the payment. Businesses currently enrolled in JobKeeper will need to review their employees to identify those individuals that may now meet the eligibility conditions (who were previously ineligible under the 1 March 2020 requirements). There is a requirement to provide each of these employees with a nomination notice by 24 August 2020, detailing the steps the employee must take to return the notice.
Businesses will also need to ensure that they have followed the correct processes to identify and confirm these new employees with the ATO for the relevant fortnight, in order to claim JobKeeper payments.
When do I have to pay these employees?
Eligible employers will be able to claim JobKeeper in respect of these new employees from 3 August 2020 (JobKeeper FN10). While ordinarily this would mean that employers would need to have met the wage condition (minimum $1,500 payment) for these employees by the end of the fortnight (being 16 August 2020), the ATO has provided an extension of time to meet this condition (see here). Businesses will have until 31 August 2020 to meet the wage condition for all new eligible employees for the fortnights commencing on 3 August 2020 and 17 August 2020.
Is the entitlement of my existing employees affected?
The entitlement in respect of existing eligible employees will not be affected. Where a business has already enrolled in JobKeeper, employees that previously satisfied the 1 March 2020 criteria will remain eligible employees of the business, providing the employer continues to meet ongoing payment and reporting obligations. They will not be required to submit an additional nomination notice, nor will the business be required to re-assess their work patterns to cover the period up to 1 July 2020.
When can we expect legislation to extend JobKeeper beyond September?
These amendments only enact the announced changes in respect of employee entitlements. It is not clear when amendments to the legislative instrument will be introduced to extend the scheme beyond its original end date in September 2020.
For further information, please refer to:
Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 7) 2020
ATO – JobKeeper key dates