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November 1 marks major compliance changes

November 1 marks major compliance changes

November 1

A number of new rules and processes will take effect from 1 November, with business leaders urged to know where they stand or risk falling afoul of the law.

While some are relevant only to particular industries or geographic locations, others will impact businesses of every description.

New retail penalty rates

Potentially the biggest change coming into effect is the new penalty rates for employers under the retail industry award.

As previously reported, the Fair Work Commission made the surprise decision to increase penalty rates for Saturdays and evenings after 6pm, as part of its four-yearly review of all industry awards.

From today, penalty rates will rise by 15 percentage points for all Saturday hours worked, and by an extra 5 percentage points for weekday evening hours after 6pm.

Offsetting that rise will be a modest cut in penalty rates for Sunday hours, which will fall to 195 per cent for full and part-time employees and 220 per cent for casuals.

Both are part of a phased change in penalty rates for night and weekend shifts that will take full effect from 2020.

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Christmas shutdown rules

While not specifically mandated from 1 November, the 11th month of the year is an opportune time to notify employees about any planned shutdown period of Christmas/New Year.

The Fair Work Ombudsman (FWO) is reminding employers that there are generally minimum notification periods required when informing workers that they won’t be needed, a window that is rapidly closing.

“For example, an employer may need to give the employee a set amount of notice (e.g. 4 weeks) that they will need to take annual leave,” its website states.

Where relevant, employees that do not have enough accrued annual leave can be forced to take unpaid leave during a mandatory shutdown period.

However, where an industry award or employment agreement does not specify policies covering shutdown periods, an employer is not able to force workers to take leave – but can negotiate directly with them over paid or unpaid leave to cover the period.

Accounting and payroll systems will need to be updated accordingly.

More information on Christmas shutdowns can be found on the FWO website.

Now late for tax returns

For anyone not pre-registered with an authorised accountant or tax agent, the deadline to lodge tax returns has now been missed.

While returns can still be lodged, any tax owed on returns lodged from this point can attract late penalties, and interest also begins to accrue.

Those penalties can be as steep as $1,050 plus $210 for every additional day the return is late, up to 28 days from today.

The tax office has issued a warning at the end of October that as many as 4.8 million taxpayers had yet to lodge their tax return – and claimed that NSW residents are the worst in the country at lodging their returns on time this year.

Taxpayers who had registered with their accountant or tax agent before 31 October have an additional window in which to lodge their return.

New long service leave rules in Victoria

November 1 also marks the commencement of new rules governing long service leave – but only employees and businesses based in the state of Victoria.

Recently passed legislation saw the threshold at which workers are entitled to long service leave drop from 10 years to just seven years.

According to senior employment adviser Natalie Clark of Employsure, other changes to the rules include:

  • An extension of leave to cover all types of employees (full and part-time, casual and seasonal) who have completed the minimum amount of continuous employment.
  • Continuous service covers employer-authorised absences on paid and unpaid leave, including parental leave (up to 52 weeks) also counting towards the period of employment for accrual purposes. Parental leave taken beyond 52 weeks will not count as service but will not break continuity of employment.
  • Employees are allowed to take single day periods of long service leave; however, no less than a full day can be requested at a time.
  • An employer and an employee may agree to taking long service leave in advance prior to seven years of continuous employment.
  • Employers cannot refuse an employee’s request to take long service leave unless it is on reasonable business grounds.
  • Long service leave is calculated on the employee’s normal weekly hours at their “ordinary time rate of pay” on the day long service leave starts.
  • It is an offence under the act to make a payment in lieu of long service leave, except where the payment is made on termination or in accordance with the relevant fair work instrument.
  • Employers must keep records relating to long service leave for at least seven years after the employment ceases.

Ms Clark warned that breaches can attract costly penalties for employers, and as such, she urged all businesses to update their payroll systems.

It covers not just businesses based in Victoria, but those based elsewhere who employ Victorian-based workers.

“It’s important that you update your payroll systems to make sure that long service leave entitlements are being correctly calculated and administered,” she said.

“Also ensure that all your relevant policies and procedures are reviewed and updated to reflect these changes.”

AFCA officially opens for business

The Financial Ombudsman Service (FOS) is no more. Neither is the Credit and Investments Ombudsman (CIO) or the Superannuation Complaints Tribunal (SCT).

All three have, from November 1, been rolled into one new authority, the Australian Financial Complaints Authority (AFCA).

AFCA will act as a single point of contact for businesses and consumers raising disputes with banks or other financial services providers.

The external dispute resolution service will be funded by the industry, making it free to consumers. As well as acting as a single point of contact, AFCA will also be able to intervene in disputes involving higher monetary limits than its predecessor organisations – opening it up to more SMEs.

More information can be found on the AFCA website.

November 1 marks major compliance changes
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