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Hourly rate must stay the same under JobKeeper

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
28 April 2020 3 minute readShare
Hourly rate

While changes to the Fair Work Act have given employers temporary scope to change workers’ duties and hours, an employee’s hourly base pay rate can’t be reduced by a JobKeeper enabling direction or agreement, the Fair Work Ombudsman has explicitly stated.

Following reports that some employers are expecting their employees to work the same hours for less pay, the Fair Work Ombudsman has underlined that changes to the Fair Work Act ensure that employers cannot reduce the hourly base rate of pay that is stipulated in their employment agreements.

Although the qualifying employer can ask their employee to work fewer hours or days under the JobKeeper enabling stand down directions, they cannot request they work the same number of hours for less pay. 

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JobKeeper is also not an excuse for employers not to pay applicable penalty rates or other allowances that apply to the hours their employees work.

“If an employee worked enough hours during a fortnight so that they’re entitled to more than $1,500 that fortnight (before tax), including any applicable penalty rates, allowances, loadings or leave payments, the employer must pay them the full amount,” the Fair Work Ombudsman explained. 

 

If the employer does not meet the hourly rate of pay guarantee, they contravene a civil remedy provision, the FWO warned. 

Increasing or cutting hours

It further clarified that employers wanting to reduce the hours or days of work must prove that the employee can’t be “usefully employed” for their normal days or hours because of changes to the business directly resulting from the coronavirus or the government’s lockdown measures.

Employers also need to consult the employee at least three days before issuing the direction and keep a written record of the consultation.

However, irrespective of the number of hours worked, JobKeeper recipient employers must pay the $1,500 fortnightly subsidy to all their eligible employees.

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This includes employees that would usually only work a few hours a week and receive a lower fortnightly salary.

However, according to the FWO, if they’ve been signed up for JobKeeper, they must be paid the subsidy in full every fortnight for the duration of the scheme.

The FWO does explain that while a qualifying employer can ask an eligible employee to work additional hours while the employer is receiving JobKeeper payments, they must have a legitimate reason to do so.

“Any additional hours worked need to be reasonable. An employee can refuse a request to work unreasonable additional hours. If the only reason for a request to work additional hours is to ‘match’ the amount of the JobKeeper payment, that is not likely to be reasonable,” the FWO cautioned.

It noted that under the general protections provisions of the Fair Work Act, it is unlawful for an employer to force (or try to force) an employee to work unreasonable additional hours, or to tell the employee that they must work additional hours as a condition of receiving the amount of the JobKeeper payment.

Example of reduction in hours

Based on a FWO example, Henry, who works for an electronics business, is given a JobKeeper enabling stand down direction that reduces his ordinary working hours from 76 to 64 hours per fortnight.

While his employer can’t reduce his base pay rate of $30 per hour, Henry now only works 64 hours a fortnight and his fortnightly pay has reduced from $2,280 to $1,920.

Henry’s reduced fortnightly pay is still higher than the fortnightly JobKeeper payment of $1,500, meaning his employer must pay him $1,920 per fortnight.

In a further example, the FWO explained that when a direction has been given not to work any hours at all, the JobKeeper payment still remains.

It presents the case of Carly, a part-time worker in a nail salon business with a fortnightly pay of $900. 

Once the nail salon closes as a result of an enforceable government direction, it is not able to offer Carly alternative duties. It, however, qualifies for the JobKeeper scheme and is receiving payments of $1,500 for Carly each fortnight, paid monthly in arrears by the ATO.

So, while Carly has been given a JobKeeper enabling stand down direction not to attend work at all, she is still is entitled to the $1,500 per fortnight JobKeeper payment that the nail salon is receiving.

The changes to the Fair Work Act under JobKeeper are due to end on 28 September, meaning workers’ hours and pay should revert to normal after that date. 

For more information on JobKeeper and employee/employer rights, visit here.

Hourly rate must stay the same under JobKeeper
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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