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Australian employers preparing for new policies from July 1st

Published: June 16, 2018

If you are running a business in Australia, you are probably already aware that a package of new labour rules prepared by the Fair Work Commission is coming into effect next month. While details of the package are publically available, there is a bit of confusion at the moment regarding what exactly will be different than before. To clarify this issue and help employers get ready for the upcoming policy shift, we prepared an overview of the most significant changes in the business landscape. It’s true that some employers may not be affected by all provisions, but is nonetheless prudent to get more familiar with the letter of the law in advance of the official implementation of the new measures.

Increased minimum wage on a national level

Perhaps the most dramatic upcoming change will be the sizable spike of the minimum wage in the entire country. Minimum pay rate will be increased by 3.5%, so a typical 38-hour work week will net at least $719.20 to the worker, amounting to the average of $18.93 per hour. The change pertains to all workers covered by the national minimum wage or a modern award, so the number of beneficiaries will be significant. This increase will put some pressure on the employers, who will have to amortize for higher labour expenses by increasing sales of shrinking the profit margins. Since the spike is relatively small, it’s unlikely that it will negatively impact new employment in most industries.

New rules for part-time employees

Employees without a full time status stand to benefit from the new policies, as they will become eligible for additional overtime compensation and minimum shift rights, much like their full time colleagues. However, exact rules will differ from one industry to another in order to reflect the particular requirements, so it’s best to visit Fair Work Ombudsman’s website and learn all the details relevant for your field of work. General idea is to bring part time contractors and casual employees one step closer to the mainstream and ensure their earning potentials remain strong in the current economy. With a guaranteed minimum of hours and the possibility to get paid for overtime, this group will have much easier time covering the costs of living.

Updated payroll reporting

Companies with more than 20 employees will have to notify the authorities about every payment through the new Single Touch Payroll tool. The obligation covers not only salaries, but also any other transactions (for example housing allowances) directed towards the employee as a part of his work contract.  If the government passes the required legislation, those rules could be expanded to smaller companies as well starting from July 1st next year. Australian Taxations Office is obviously taking a more hands-on approach to controlling the money flow, but it remains to be seen how smoothly the enforcement will go and whether new rules will increase the administrative burden on employers.

More stringent food labelling

Rules of the marketplace are about to change regarding labels on imported food products solid in Australian retail stores. Labels will have to clearly display the country of origin, indicating the source of the product to the consumer. This is not a new requirement – the same rule has been in place since 2016, but it now becomes mandatory after the expiry of a 2-year transition window. The rule will apply only to products packaged after July 1st, so supermarkets and other retailers have some time to sell off the remaining supplies without the label. The Australian Competition and Consumer Commission has provided detailed guidelines that will simplify quick production of law-compliant labels.

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