Couple using calculator Accounting Calculating Cost Economic bills with money stack step growing growth saving money in home , finance concept

Super Guarantee amnesty for employers – Bill re-introduced

Stephen Booth ||

The Federal Government has announced another attempt at offering an amnesty to employers who have not complied with superannuation guarantee legislation.

The first try at this was announced in May 2018, with a 12-month window (from the date of announcement) to self-report for non-complying businesses. The only problem was that the Government could not get the legislation through the Senate, and it lapsed in April 2019 when the election was called.

Nevertheless, a number of employers did take up the apparent opportunity to self-report without penalty, on the basis of the proposal as announced, but which never became law, and were therefore exposed to the penalties arising from the original non-compliance. So, the ATO had to remit penalties to avoid the employers from suffering serious consequences from having relied on the Government’s announcement.

The new amnesty proposal, announced (and again introduced into Parliament) on 18 September 2019, stated it would operate from 24 May 2018 to a date 6 months after the legislation comes into law, and would validate past disclosures and allow another 6 months for employers with super skeletons in the closet (from before 31 March 2018) to come clean.

The new legislation comes with an additional incentive to self-report: an employer with past super defaults, who does not take advantage of the new amnesty, will face a 200% penalty for the underpayments, which the ATO cannot remit to an amount below a 100% penalty.

This additional feature may be intended to address the issue which caused the Opposition and some crossbenchers to object to the amnesty in 2018 – that the amnesty allowed errant employers to get off scot-free. It remains to be seen whether the tougher penalties post-amnesty will be enough to get the amnesty through this time.

The Government’s argument is that the amnesty will incentivise employers to bring to light historic underpayments, which will otherwise not surface unless uncovered case-by-case by the ATO or reported by affected employees. So, the employees who have been gypped will be better off, and more of them will probably benefit than under the ordinary enforcement processes.

The Opposition’s argument is that offenders should not be rewarded for bad behaviour, which is true enough at a time of heightened consciousness of wage theft, and highlights the moral hazard in the amnesty scheme, but will not help build the underpaid super accounts for the benefit of the employees.

It is expected that the single touch payroll system will give the ATO much better information for identifying shortfalls promptly, so future non-payers will have smaller scope to hide, which may expose a lot more historical underpayment.

Putting aside deliberate failures to pay super (which commonly occur in cash-strapped businesses, as well as with employers willing to game the system), confusion about superannuation liabilities can result in underpayments.

Common confusions include:

  • which payments are, and which are not, “ordinary time earnings”, and hence give rise to the liability; and,
  • whether contractors, or other non-typical workers, are “deemed employees” because they essentially supply labour – the liability does not apply only to employees in the traditional sense.

If you need assistance to make sure you are applying the rules correctly, please do not hesitate to contact a member of Coleman Greig’s Employment Law team.

Share:

Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.

Categories
Archives
Author

More posts

Employers should exercise caution when dismissing during probationary period

Can you dismiss an employee during the probationary period? Yes, but a recent case is a lesson in caution. The recent Federal Court decision of ‘Dabboussy v Australian Federation of Islamic Councils’ is a warning to employers to consider the importance of timing if dismissing an employee during probation.

The business impacts from the Government’s new cyber security laws

Cybercrime ‘is a multibillion-dollar industry that threatens the wellbeing and security of every Australian’. In an effort to combat the impact on businesses and individuals, the Australian Government has introduced cyber security legislative reforms into the Parliament.

A guide to intrafamily adoption

Adoption is the process where a parent’s legal rights for their child are transferred to another person. The formal adoption of a stepchild or close relative is known as intrafamily adoption.

Passenger movement and visa data-matching by the ATO

Heading overseas for work or a holiday? Taxation issues, including tax residency, should be on front of mind when departing from or arriving to Australia. Why? Because the Australian Taxation Office (ATO) can follow your footprints and, if you’re not careful, spring unexpected taxes on you.

Is it really necessary for my executor to have so many powers?

People often question why the executor of their estate needs to have so many powers. Simply put – if your executor isn’t given any additional powers by your Will, then they are limited to what is set out in the Trustee Act. One area that this can lead to issues in, is the family home – particularly if beneficiaries aren’t in agreement.

Essential terms of a commercial lease

A commercial lease is a contract that details the rights and obligations of a tenant and landlord. So, what are the necessary terms of a commercial lease?

Responding to data breaches

In the final part of our four-part series on your business’ responsibilities related to cyber attacks and data breaches, Special Counsel John Bennett how businesses should respond to data breaches, including application and requirements of the Notifiable Data Breaches Scheme.

Security of personal information

Part 3 of a four-part series on your business’ responsibilities related to cyber attacks and data breaches where Special Counsel, John Bennett provides an overview of some court decisions and proceedings where ‘security’ of personal information has come into issue.

Parental alienation in Family Law

The concept, Parental Alienation Syndrome, was initially brought about by American psychiatrist Richard Gardner in 1985. The term parental alienation is used to describe a situation where one parent is involved in psychologically manipulating their child to turn against the other parent.

Are you liable for labour hire workers if they are injured?

Many employers (host employers) engage employees of labour hire companies, particularly in the building and construction, hospitality and manufacturing industries. However, what happens when one of these employees gets injured at the host employer’s work site? Who is liable for the injuries?

© 2024 Coleman Greig Lawyers  |  Sitemap  |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230