Currently before Parliament is the ‘Closing the Loopholes’ legislation, which will have major implications for small businesses in the creative industries in 2024, particularly as many of these SMEs have needed to transition from being sole traders to companies for contractual reasons.
Apart from potentially criminalising superannuation underpayments, the new laws will feature the following elements:
· a new definition for casual employment
· changes to employer and employee causation
· protections for independent contractors (shadow employees)
· penalties for sham contracting arrangements
· human rights protections for employees suffering from family violence
· Fair Work Commission (FWC) to be given new powers to review unfair agreements
It has never been more important to ensure that employees are paid accurately and in accordance with their employment agreements, awards and FWC mandates.
Closing the Loopholes follows a raft of other important IR measures over the last year:
· abolishment of pay secrecy clauses in employment agreements
· introduction of paid family and domestic violence leave
· changes to flexible working arrangements
· limitation on fixed term contracts to two years or less
Then there are the increases in the compulsory super guarantee rate from 11.0% in 2023/24 to 11.5% in 2024/25 and 12.0% in 2025/26 – the end point as envisioned by the Keating government over thirty years ago – except there is more!
From 1 July 2026 payday super will become law and employers will have to pay their employees’ super at the same time as their salary and wages. Of course, by this stage, all employers should be using electronic payroll systems and be fully compliant with the STP (single touch payroll) requirements of the ATO.
From a tax policy perspective, the tightening of Australian IR and superannuation policy can be seen as a response to the overly generous compensation payments made to employers during the pandemic.
If another state of emergency arises, eligibility for schemes such as JobKeeper and Cash Flow Boost would be expected to be restricted to employers who are compliant with all the requirements brought forward since COVID-19 by the ATO and FWC.
Please contact our team for more information about these important IR changes.
Artwork image: Al Poulet, Untitled (#9) (2023).