Navigating changes to the employment landscape in FY20

Articles Written by Jan Dransfield (Partner), Erin Wilson (Special Counsel)

As we approach 1 July, it is important to assess changes in the employment landscape for the next financial year.

Employers should consider how these changes will impact their business. For many businesses the changes will result in an increased financial burden accompanied by complex compliance considerations.

Key takeaways for 1 July 2019

  • Employers need to get across the increases to minimum wage and award rates of pay; higher thresholds for unfair dismissal and the high income guarantee, and the new superannuation contributions base.
  • New whistleblower laws start – employers need to get procedures in place, preferably with compliant policies, and train managers about how to deal with disclosures.  We can help you with this by:
    • drafting or reviewing your policies;
    • preparing protocols for managers;
    • providing training (or training packages) for your managers and staff to understand their obligations and how to properly handle disclosures.

Increase in the National Minimum Wage and modern award rates

Effective 1 July 2019, the national minimum wage will increase by 3% to $19.49 an hour or $740.80 a week. The announcement by the Fair Work Commission is based on the recommendations of the 2019 Annual Wage Review.

There will also be a 3% increase to full-time minimum wage rates in modern awards.  Allowances will increase in accordance with the provisions of the relevant modern award.

Changes to the High Income Threshold

On 1 July 2019 the high income threshold will increase to $148,900 per annum from $145,400 per annum.  This is significant because the high income threshold:

  • limits an employee’s access to the unfair dismissal jurisdiction.  If an employee’s annual rate of earnings is more than the high income threshold, the employee is not able to bring an unfair dismissal claim (unless they are covered by an award or enterprise agreement);
  • increases the maximum compensation for unfair dismissal to $72,700 (half of the high income threshold);
  • sets the minimum amount of guaranteed earnings to be met for an employee to be a “high income employee” for the purposes of award coverage.  This means that if a high income guarantee is entered into, the employee is not subject to the application of any modern award.

Changes to the Maximum Superannuation Contributions Base

The maximum superannuation contributions base is used to determine the maximum limit on any individual employee’s earnings base for each quarter of any financial year.  Employers are not required to provide superannuation support for the part of earnings above this limit.

From 1 July 2019, the maximum superannuation contributions base will increase to $55,270 per quarter (or $221,080 per annum) from $54,030 (or $216,120 per annum). 

New whistleblower legislation

The new whistleblower regime will take effect from 1 July 2019 and will apply to disclosures made on or after this date. However, the disclosures may relate to conduct that occurred before this date.

Under the new regime, public companies, proprietary companies that are trustees of a superannuation entity and large proprietary companies must each have a compliant whistleblower policy.  Large proprietary companies must have a compliant policy 6 months after the last day of their financial year in 2020.  For many entities with a financial year end of 30 June 2020, this will be 1 January 2021.[1]  In the case of public companies and trustee proprietary companies, policies must be in place by 1 January 2020.

As companies need to comply from 1 July 2019, we recommend that companies prepare compliant policies now so that proper procedures are in place for 1 July 2019, and that managers are trained to properly handle disclosures that are made and protected under the new laws. 

For more information about the whistleblowing legislation, please see our updates:

The Whistle has finally blown – New whistleblower regime commences - April 2019

Proposed amendments to whistleblower laws – what’s new? - June 2018

[1] A large proprietary company borrows the definition from the Corporations Act 2001 and means a proprietary company that satisfies at least two of the following: (a) the consolidated revenue for the financial year of the company it controls (if any) is $25 million, or any other amount prescribed by the regulations or more; (b) the value of the consolidated gross assets at the end of the financial year of the company and the entities it controls (if any) is $12.5 million, or any other amount prescribed by the regulations, or more; (c) the company and the entities it controls (if any) have 50, or any other number prescribed by the regulations, or more employees at the end of the financial year.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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