With Australia officially in a recession and JobKeeper reductions looming, what does HR need to know to stay ahead of the issues their teams might face?
On Wednesday, the Australian Bureau of Statistics revealed that Australia’s national GDP shrank by 7 per cent in the June quarter, forcing the country into its first recession in 30 years.
The night before the Federal Government approved the extension of JobKeeper for another six months, pushing its expiration date to March 2021.
While JobKeeper has been a lifeline for employers and businesses across the country – and JobKeeper 2.0 will go some way to keep the lights on – it’s worth considering the changes to JobKeeper in terms of what other issues employees are struggling with.
HRM broke down the changes to JobKeeper when they were proposed back in July. While the bill passed last night remains true to the original proposal, one additional feature was the extension of employer powers for legacy JobKeeper users.
This means if an employer was eligible for the first round of JobKeeper but not for JobKeeper 2.0 they can retain some of the industrial relations flexibility measures (if they have suffered a drop in revenue of at least 10 per cent).
Under the new change, legacy users are empowered to reduce employees’ hours by up to 40 per cent, so they can work a minimum of 60 per cent of the average hours they worked as of March 1 2020.
Employers remaining on JobKeeper retain the ability to make various changes to their employee’s working hours, including standing down workers if needed.
To be eligible for JobKeeper 2.0, employers must provide a certificate from a registered tax agent, BAS agent or qualified accountant. Certificates from company auditors or financial advisers will not be considered. Small businesses with less than 15 employees can provide a self-certificate.
For employers currently receiving JobKeeper and wishing to add newly eligible employees to the scheme, the Australian Taxation Office recently issued guidelines on how to do so either through Single Touch Payroll or the ATO’s online business portal.
Businesses will need to reapply for JobKeeper 2.0 through the ATO and prove their eligibility each quarter. The amount an employee can receive is determined by the hours they worked in February this year. Staff who worked more than 20 hours will receive $1,200 per fortnight, those who worked less than 20 hours will receive $750 per fortnight. This amount is set to be reduced again come January 2021.
Australian National University researchers suggest JobKeeper and JobSeeker kept about 500,000 people out of poverty. However, with reductions in both payments, it’s possible employees could begin struggling to afford their rent, particularly if they are from a single income household.
Renters in Victoria have a reprieve with an eviction moratorium in place until December 31. Some tenants might also be eligible for a $3,000 grant from the Victorian Government. These protections also extend to commercial renters, many who have seen massive downturns in foot traffic following lockdown.
Outside Victoria, however, the protections aren’t as clear. The Federal Government has urged renters and landlords to negotiate in “good faith” but a report from renters advocate group Better Renting found those 20 per cent of tenants that asked for a reduction were rejected. The majority of renters weren’t even comfortable asking for a reduction despite over 60 per cent of respondents suffering financial difficulties due to COVID-19.
It is worth HR professionals being mindful of these issues – as more households are placed in difficult positions, that stress can spill over into workplaces. It’s possible more employees will require assistance from their employers to manage that stress.
Equally under pressure at the moment are parents struggling to find affordable childcare. A report from online finance publication Mozo revealed more than 70 per cent of parents are considering reducing childcare hours due to the cost.
The Grattan Institute has recommended raising the child care subsidy for families earning less than $68,000 but so far there has been no movement on a federal level to ease the pressure on families.
Without support, working parents might need to consider reducing their hours to care for children. As HRM has previously reported, lack of childcare has a disproportionate impact on women who often end up putting their careers on hold to become primary caregivers.
All of these issues need to be considered within the context of the JobKeeper –as we head into this recession, it’s likely they will only get worse. COVID-19 has demonstrated just how vital HR is for business and employee wellbeing, so staying aware of your employee’s personal situation will help you respond effectively to their needs.