HRM rings in the new (financial) year by looking at three things that are changing in the workforce.
While 1 January is a time for individuals to make resolutions that won’t last the month, 1 July is a time for businesses to make sure they’ve got their house in order as they ring in the beginning of a new financial year.
This year has seen a slew of changes that will impact HR. Here is a checklist to ensure you are prepared.
Single Touch Payroll
HRM has written about this before, but now it’s really important.
As of 1 July, any business that hires 19 or fewer employees is required to implement Single Touch Payroll (STP) into their pay processes (they join larger businesses that began STP this time last year). There is flexibility on the date, the Australian Tax Office (ATO) is allowing employers to start reporting from anytime until 30 September.
This flexibility will come in handy as, according to the December 2018 MYOB Business Monitor report, only 31 per cent of small business owners understood they were required to use STP and only 18 per cent were using the system.
The report shows that small businesses which had begun to use STP had positive experiences. Respondents gave the process an average score of 7.2 (out of 10) and 65 per cent said the payment summary process took less time when using an STP system.
The purpose of STP is to streamline the tax and super information provided to the ATO. Most payroll, accounting and business management software is already STP enabled, but if you work in HR in a smaller business, it might be good to confirm whether or not you have STP in place.
HRM’s previous article on this subject talked about the benefits of this system before, as well as how the ATO is offering support through this change. Here is a summary of the pertinent facts:
- If you have payroll software check to see if it is compatible with STP
- If you don’t have software, choose a product that offers STP
- You can ask your tax or BAS agent for advice on choosing a product that suits your business needs or find out more here
- Update your payroll software when it’s ready
- Start reporting to the ATO through STP
- Click here for more information, resources, news and detailed guidelines
While businesses have until September to make a report, it’s best to get on top of the system while you’re feeling refreshed in the new year.
The new minimum wage
In its annual wage review earlier this year, the Fair Work Commission announced a national minimum wage increase of 3 per cent, to $19.49 per hour ($740.80 per week). All Modern Awards minimum wages have also been increased by 3 per cent, but the casual loading in modern awards will remain at 25 per cent. This change takes effect from the first full pay period on or after 1 July.
But of course, with the new financial year, it won’t just be the minimum wage that gets a bump. People are job hopping with more frequency (someone who has changed roles five times in ten years).
HRM has reported research from Gartner that reveals 36 per cent of hiring managers think a major reason why the candidates they talk to left their previous roles is for higher salaries and career progression. In order to ensure you retain top talent it is important you offer them attractive salaries.
It’s essential that organisations invest the time to accurately reflect upon, evaluate and measure an employees’ performance and proposed pay review. AHRI’s course will get your performance management skills up to scratch.
It’s not just the long term employees that should be rewarded with a pay review either. The same article talks about how 71 per cent of hiring managers would happily recruit a job hopper. So it’s important to make sure you’re valuing your shorter-tenured employees as, especially if they’re not in a senior role. The evidence is that other companies won’t hold their relatively short amount of time with you against them.
Australia’s visa regime is still undergoing changes. Some fees are increasing in line with yearly reviews, and there are other legislative changes that come into effect in November.
The training levy known as the Nomination Training Contribution Charge (NTCC) still needs to be paid by employers for people on the following visas:
- Temporary Skill Shortage subclass 482 (which is replacing the 457 visa subclass)
- Employer Nomination Scheme subclass 186
- Regional Sponsored Migration Scheme subclass 187
These NTCC payments increased by 5.4 per cent from 1 July. For the TSS 482 visa, businesses (with a turnover rate less than $10 million) will be required to pay a $1,238 fee for each nomination. And there will be a fee of $3,958 for the ENS 186 and RSMS 187 visas.
On 16 November the RSMS 187 visa will be replaced by the Skill Employer Sponsored 494 visa which will allow for 9,000 visas per year. A condition of the SES 494 visa is that the employer sponsorship and the applicant’s job must be likely to exist for five years. On top of that the applicant must have competent level of English, qualify for RCB advice, meet the annual salary market rate, be under 45 years old, be assessed for suitable skills and have at least three years of skilled employment.
To find out more about these changes and more changes planned for November this year, read more here.
These aren’t the only changes HR need to be aware of. Here are a few other things that are worth keeping on your agenda: