Extension and Changes to JobKeeper Payments & Directions to be confirmed soon

The Federal Government’s proposed legislation to deal with the continuation of the JobKeeper scheme is currently being considered in Parliament, with a final decision on the legislation regarding changes to JobKeeper Payments & Directions expected to be made on Monday.

Changes to JobKeeper Payments & Directions

The proposed legislation gives effect to the Government’s earlier announcements that the JobKeeper subsidy will be extended to the end of March, albeit with a drop from $1,500 a fortnight to $1,200 a fortnight from October and to $1000 a fortnight from January for employees who worked 20 or more hours per week prior to the pandemic. Rates of pay for employees who worked fewer hours will be $750 per fortnight from October and $650 from January.

The proposed legislation also deals with the extension of the powers that were conferred on employers through amendments to the Fair Work Act 2009. This allowed employers to reduce employees’ hours (through JobKeeper Enabling Stand Down Directions) – down to zero hours in some cases – and to require employees to take annual leave.

What had not been clear from the Government’s earlier announcements was whether these powers – currently legislated to end on 28 September 2020 – will be extended for all employers currently receiving the JobKeeper subsidy, or only for those who will continue to be eligible post-September.

The Government’s proposal is that only employers who remain eligible for JobKeeper will be able to continue to exercise these powers, and for employers leaving the JobKeeper scheme (“legacy employers”) there will be much more limited rights: they will only be able to to use these powers if they can demonstrate their turnover has declined by 10% or more in relevant quarters this year compared to last year.

Furthermore, the powers that legacy employers will be able to use will be more restricted – legacy employers will not be able to give JobKeeper Enabling Stand Down Directions that reduce an employee’s hours of work below 60% of the ordinary hours they worked at 1 March 2020), or to require an employee to work less than two hours on a day they work.

It is therefore likely (if the legislation regarding the changes to JobKeeper Payments & Directions is passed in its current form) that many employers will need to increase employees’ hours by the end of September, or face difficult decisions about continuing their employment.

The proposed legislation is proving controversial and it is likely that it may be amended before it can be passed by the Senate. We will be analysing the legislation as soon as it has been passed and providing further guidance for employers as soon as we know more.