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key workplace changes come into effect

23 July 2012

As we embark on a new financial year it is timely to consider the legislative changes that may affect your workplace practices.  

Award Increases 

Recently, Fair Work Australia (FWA), the Government’s industrial umpire, announced an increase of 2.9% to the minimum wage in modern awards, effective from the first pay period on or after 1 July 2012. This increase applies to the minimum wage entitlements of most employees covered by the national system.

For adult employees who aren’t covered by an award or agreement, the adult national minimum wage has increased from $589.30 per week to $606.40, or $15.96 per hour. 

It is important to check the modern award(s) relevant to your workforce to ensure that no workers are receiving less than the new base rate of pay. 

Work-related allowances (such as mileage, meal, clothing, leading-hand and tool allowances) are calculated as a percentage of the ‘standard rate’ in each modern award. Therefore as the annual wage review increases the standard rate, this will flow through to any work-related expenses. 

National Paid Parental Leave 

The national paid parental leave (NPPL) scheme is a government funded entitlement that provides an eligible working parent with 18 weeks’ parental leave pay at the national minimum wage. 

In most instances the NPPL payment is made by the Government via the employer. In line with the minimum wage increase decision, the NPPL amount has increased to $604.40 per week from 1 July 2012. 

Unfair Dismissal Thresholds 

Employees who are not covered by an award or an agreement and who are earning more than the “high-income threshold” are excluded from the national unfair dismissal provisions. 

The “high-income threshold” increased from $118,100 per annum to $123,300 per annum with effect from 1 July 2012. 

The maximum compensation available under the unfair dismissal provisions is the lower of the employee’s last 26 weeks’ pay or half the high income threshold at the time of the dismissal. From 1 July this threshold has increased from $59,050 to $61,650. 

Superannuation Guarantee Contributions (SGC) 

The superannuation guarantee requires employers to contribute an amount equal to at least 9% of an employee’s ‘ordinary time earnings’ per quarter to an approved superannuation fund. The contribution is capped. 

For the quarter commencing 1 July 2012 the maximum superannuation base will be $45,750. Therefore, the maximum amount of the superannuation guarantee contribution (SGC) paid on behalf of an employee will be $4,117.50 (9% of $45,750). 

Building and Construction Industry Contractor Payments 

With effect from 1 July 2012, businesses in the building and construction industry will be required to annually report to the Australian Taxation Office (ATO) payments made to contractors. 

The regulations apply to a wide range of building and construction services including site preparation, building demolition and alterations, project management and architectural services, communications, landscape and drainage construction, electrical, plumbing, bricklaying, glazing services etc. 

For each contractor, businesses are required to report details including the contractor’s ABN, name, address, the gross amount paid for the financial year (including GST) and total GST included in the amount paid. 

The first Taxable Payments Annual Report is due 21 July 2013 for payments made in the 2012-13 year. However businesses are encouraged to review their record keeping procedures to ensure all the necessary information is recorded to easily complete the report by the due date. 

Portable Long Service Schemes (NSW) 

Long service leave for employees in the building and construction industry in NSW is funded by a levy on building work and does not require employer contributions. Employers in the industry must report details of workers employed and their period of service each year to the NSW Long Service Leave Corporation. The report for the 2011/12 year must be completed and returned by 31 July 2012. 

Similarly, contract cleaning employers and independent contract cleaners must register with the Long Service Leave Corporation. The long service fund in this industry is funded by a levy of 1.7% of employee’s ordinary wages and paid by the employer. Independent contractors must also pay the levy and provide service details. For the quarter commencing on 1 July, the return must be lodged with the Long Service Leave Corporation by 14 October 2012. 

If you would like more information about any of these workplace changes, please contact Boyce HR Manager, Gabrielle McFarland on 02 6452 3344 or by email to gmcfarland@boyceca.com. 

Source: NSW Business Chamber – Circular No. 2012/132; Fair Work Ombudsman website at www.fairwork.gov.au; Australian Taxation Office website at www.ato.gov.au.

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