The Fairness of Jobkeeper on Small Business and Employees

by Anna Spoore May 11, 2020

The Fairness of Jobkeeper on Small Business and Employees

Here at Uplift Fair Trade, we are constantly talking about how we run our business how we can make fairness our top priority in everything we do. 

In order to grow a small business, there is a limitation on crisis-management tools. it is increasingly evident that we need the government and private sectors to join together. There are no accurate answers to it, just countless "unknowns" at this stage. Supply chains, eruptive markets, and the impact of travel bans and social distancing will make collaboration easy. However, it will be farfetched to keep everyone happy.

 During this time of coronavirus in Australia, the government has released a package that includes what is being called Job keeper payment. The aim is to keep businesses running and people in jobs. Job keeper, in short, is a wage subsidy paid to businesses that qualify, so they can pay staff throughout this crisis.

 As a small business owner whose focus is ethics and fairness, I have welcomed and are very grateful for the supplement particularly as we have closed our physical shop doors but are trying to get sales through our website. However, I have struggled with some of the ways the job keeper is being rolled out.

I have thought long and hard about each aspect of Job keeper on how "fair" it is for staff and upon our business as a whole and thought I would write my thoughts into a scorecard.

This is how the scorecard will be broken down. 

 

Firstly, I want to acknowledge that every business is different, what might be an issue for us might not be an issue for others. Secondly, we are very lucky to be getting anything from our government, therefore - I’m grateful. Our partners in India are telling me they are not getting anything from their government to stimulate the economy at all. Thirdly this is a complex issue and a “scorecard” cannot completely dialogue the fairness of something, it is just my opinion in the situation I am in. Hopefully, it will encourage a deeper discussion and maybe even a conversation with your local MP. I will take my points from the Job keeper payment fact sheet and give them a fairness rating.

Employers must offer Job keeper to all staff that meets eligible criteria, employees were engaged as of March 1, 2020, including staff who were stood down or rehired.

 

 Fairness of Jobkeeper

This is great news for staff who have been stood down (not fired) it means no one gets left behind and employers can’t discriminate selecting some employees and not others.

However, for the employer, it’s another person they have to run the new payroll system for creating more admin costs as well as finding 3 pay runs worth $4500 approximately depending on their payroll cycle upfront. It also could put pressure on the employer to try and reskill or “find work” for that person until the business gets back to usual.

A minimum of $1500 per fortnight before tax is to be given to all employees even if they earnt less before.

 

Jobkeeper fairness on small businesses  

This could be great for the casual worker who only works one day a week they could be getting a $1000 pay rise.  However if it affects other benefits they usually get from Centrelink it could get very complex for them in the way they report, affecting things like child-support etc.

It could also mean their employer will ask them to change their hours according to working for the full $1500, this may not fit with their family life.

 For the employer giving $1500 a fortnight could mean a readjustment of the roster forcing them to consider dropping some people's hours and increasing others.  (what a stress!) Giving them the ethical dilemma of asking someone to work more hours to fill a gap or asking staff to drop hours.

 

Employees are to fill out a nomination form to give their employer declaring their eligibility. 

Fairness of jobkeeper on small business

 

So this sounds fair until you hear some employees are saying they are eligible and they are not. How is the employer meant to know they are telling the truth? Then the employer pays them a month in advance as required by the ATO but then the staff member gets rejected based on something the employer didn’t know. How does the employer get the money back?

 

Self-employed and sole traders and owners will also be eligible to receive Job Keeper.

 

JobKeeper payments for small businesses  

With some business owners, this will be the only motivating factor to claim for Job keeper, if their workforce is small but they have a low cash flow. It also means everyone is placed on an equal playing field helping the business survive. However, the difficulty comes for business partnerships as only one partner is allowed to claim. For some employers, it might be the first time they are paid by their business.

 Job keeper payments are to be paid one month upfront from March 30 by the employer then the ATO will release funds in May to subsidise this payment.

 

jobkeeper payment fairness for small business

What the heck? The whole point of this is to help businesses keep afloat and keep their workers. This alone could be why a lot of my retail friends are not even applying for a Job keeper! They can’t find the capital upfront to pay for it. For me personally, I had to get a bank loan! (Aggghh) I also ran the biggest pay run I have ever done when my shop is closed! Giving each employee $3000 each in one go! This is very hard on business.  For business owners, there is also fear not being paid back or being found not eligible.

 As of 24 April job keeper rules have changed to make under 18-year-olds not eligible while still studying at school or still living at home.

  Jobkeeper can be unfair for small businesses and employees

 

Okay, so this one makes me super mad. As a business we rely on our junior staff, we have already paid the upfront in advance to them however now the rules are changing.

Really not fair that it was promised and now is being taken back. I know of many young people who supplement their families' incomes with part-time work. Now I have to consider sacking a staff member after telling her she was entitled to Job Keeper.

 Staff are only eligible for Jobkeeper after working 12 months or more.

 

I know people who only missed out on this by one week. For me I have one staff that has missed out because of this, he has been working six months for us. This is hard on the business, letting good staff go as well as staff themselves being out of work.

Job Keeper will be paid from 30 March till the 27th of September.

 

 

Six months is a very generous period of time given by the government and will hopefully mean businesses will recover and jobs will be kept.

(Lets hope this doesn't change with possible new announcements. Business needs this to recover)

 As you can see "the devil is in the detail” has become a saying for us trying to make fair choices for both our staff and for the business as a whole to keep it running. I can’t say it’s been easy and I want to shout out to my amazing bookkeeper who I have been on the phone to most days (I wish she was getting a bonus from the government for all her hard work trying to sift through all the ins and outs!!).

The fact is for some businesses this will save them and for others, juggling the unfairness of some of the rules with Job keeper, it is too much stress and too much administration so they have decided to give up or some are even doing something dodgy to get around the rules. No system is completely fair but why couldn’t the government support jobs through wage subsidy on the basis of an average income through the last six months of employees? Admin would be less, it would be fair for the employee and less stress on the business.

I hope this brief overview of the fairness of Job keeper has given both sides of the story for people. I have seen many Memes going around criticising bosses and businesses' implementation of it. Please understand it is complex and the rules keep changing. However, if you believe your boss is doing something wrong I would first check the facts with treasury.gov

then approach them with… Did you know….

If they respond with a dodgy unfair answer you can report them to the Fair Work.

They are not allowed to

Pay you a smaller rate per hour than they usually do

Ask for the money back

Charge an admin fee

Fire you if you can’t work more hours than usual

They can:

ask you to work more hours (within what’s fair with your family circumstance)

Change your role or tasks within the business to reflect the current circumstances

 

Please remember to support your local businesses that are struggling right now! 

Shop with us here

I have not commented on the eligibility of non-Visa holders as I myself have not experienced any of my employees to have to work this one through. I would love to hear comments about the experience with this.

 





Anna Spoore
Anna Spoore

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