Fair Work for Bookkeepers

A Bookkeepers practical view of what the Fairwork new laws mean.

As you process payroll and related matters things have changed!

Important definition

"Small Business receives concessional conditions detailed at times below:  Defined as having fewer than 15 Full Time Employees.

Different Actions

1)      Issue a "Fair Work Information Statement to every new employee.

Probably a reasonable idea to issue it to all existing employees but it is not required.

c    Obtain the standard form (www.icb.org.au/fairwork or www.fairwork.gov.au) and build it into your new employee systems (new employee systems on ICB.org,au)

2)      Follow the Fair Dismissal Code in order to dismiss someone (see below and ICB website). There is a concessional process for Small Business.  Government have provided guidance notes and a checklist to follow which can form part of the permanent record.

3)      Annual leave (when more than 4 weeks owed) may be cashed out to reduce the entitlement down to 4 weeks being owed.

c    Know how to pay hours of annual leave that will be cashed out

c    Best practice is to create a "Cashed out annual leave category

c    Refer ICB website for how it is taxed

4)      Personal/Carers leave can be cashed out if it is part of the award down to 15 days entitlement.

c    Know how to pay hours that will be cashed out

c    Best practice to create a "Cashed out personal leave category when required

c    Refer ICB website for how it is taxed

5)      Employees can take community service leave (jury duty - paid for up to 10 days, or other unpaid eg fire fighting unpaid)

c    Best practice to create a "Community Service Leave Paid Category and "Unpaid category - when required

Things you probably have been doing that you need to do

a) Leave entitlements are now different (change your computer setup)

                        4 weeks annual leave or 5 weeks for shift workers

                        (keep it simple - 4 week leave accrued in every 12 months)

                        accrued and accumulates from year to year

                        Excess annual leave can be paid out in cash

c    Ensure it is accumulating and ensure it is 4 weeks over each 12 months (remember annual leave accumulates when you are on annual leave)

                        10 days paid personal/carers leave per year (used to be called sick leave)

                        accrued and accumulates from year to year

c    Change the name to Personal Leave in the system

c    Ensure it is accumulating and the balance carries over from year to year

2 days unpaid carers leave (not accrued just taken at the time each time

(ie maybe several times a year - check the eligible circumstances below)

c    Create the category of leave in the system and record when it is taken

c    Report leave taken like this to ensure it is not overtaken

2 days PAID compassionate leave (not accrued or accumulated just taken at the time of each serious threat to life of a family member)

c    Create the category of leave in the system and record when it is taken

c    Report leave taken like this to ensure it is not overtaken

                        12 months unpaid parental leave

                        (possible additional 12 months as well, not accrued nor accumulated)

c    Create the category of leave in the system and record when it is taken

IMPORTANT SIDE NOTE: 

c                      Ensure each employer keeps adequate records of each employees leave taken, and cashed out, in a readable and comprehensive form for the life of the employee.  Too many problems occur from inadequate leave records argued about at time of termination.  Refer ICB website for leave record and other templates.

Who gets paid for pubic holidays?

An employee (other than a casual) who normally works on the designated public holiday, or its substituted day, is paid for that day off for the same amount of hours that they would normally work.  ie: ordinary pay, no overtime

What other things d"s a bookkeeper need to know?

An employee may be directed to take annual leave for a short period of shutdown or when they have excessive annual leave.

The new system will mostly not change pay rates until 1 July 2010 - then the new awards kick in.

Current federal minimum wage is $14.31/hour before tax (will change in July 2010)

Redundancy:  Normally (ie 15 or more employees) then 4 weeks pay for redundancy after 1 years continuous service, up to 16 weeks for 9 - 10 years.

For small business then make people redundant by following the Fair Dismissal Code.

Parental Leave (Maternity or paternity?) still is 12 months.

An additional 12 months period can be requested.  Requests must be in writing and applied for 4 weeks before end of original leave period.  Can be refused on reasonable business grounds

The new system has 10 minimum work requirements (National Employment Standards) as from 1 January 2010:  (Detail Below)

1.          Maximum weekly ordinary hours:  38 hours

2.          The right to request flexible working arrangements

3.          Parental leave (up to 24 months) and related entitlements

4.          Annual leave (4 weeks or 5 weeks for shift workers)

5.          Personal/carer's leave and compassionate leave

6.          Community service leave (10 paid days conditions apply)

7.          Long service leave standardised

8.          Public holidays guaranteed

9.          Notice of termination and redundancy pay

10.      Provision of a Fair Work Information Statement

If you breach these standards personal penalties of $6600 and business penalty of $33,000

Who?

All employers and therefore all employees in ACT, NT, Vic & WA

All employees for non-government in NSW, QLD, SA & TAS

The Fair Work Ombudsman has also released a checklist for employers to consider: