Below is an overview of what employers need to know and their legal obligations.
If you engage workers, there are several legal obligations that you must abide by, because as soon as you employ workers, you will most likely have tax and superannuation obligations at the least, as well as information outlined in the National Employment Standards. Firstly, you will need to decide on the following and much more:
- employees or contractors
- what awards apply
- what entitlements (if any) apply
- How much superannuation to pay
- Tax to withhold
- when to pay your obligations
- what record to keep
Employer Obligations Checklist
- Modern awards are industry or occupation-based minimum employment standards which apply in addition to the National Employment Standards (NES). They were created to establish one set of minimum conditions for employers and employees across Australia who work in the same industries and occupations.
- National Employment Standards – The NES sets out 10 minimum workplace entitlements which apply to all employers and employees in the national workplace relations system from 1st January 2010 (however only certain entitlements apply to casual employees). These are enforceable minimum employment terms and conditions.
- Fair Work Information Statement – All employers covered by the national workplace relations system must give each new employee a Fair Work Information Statement (FWIS) before, or as soon as possible after, the employee starts employment.
- Fair Work compliance – There are some things employers occasionally indulge in which are unlawful, such as unpaid trials, paying in goods rather than money, pressuring employees into any agreements, coercing employees or third parties not to exercise their rights, unlawful discrimination and termination, and sham contracting.
- Dispute Resolution – Modern awards generally provide the process to assist in the resolution of disputes that arise about matters under the award or the National Employment Standards. If cannot resolve the conflict at the workplace level, refer the matter to Fair Work Australia.
- Record-Keeping – According to Fair Work Ombudsman records need to be kept for 7 years, while the ATO says 5 years. Err on the side of caution and hold for 7 years.
Pay As You Go Withholding (PAYGW)
As an employer you must withhold amounts from payments you make to your employees (including directors/directors fees), other workers (such as contractors that you have voluntary agreements with), and businesses that don’t quote their Australian Business Number (ABN).
- If the correct amount of super guarantee (SG) for employees is not paid to the right fund by the due date, then you may have to pay the super guarantee charge (SGC), which is not tax-deductible.
- Understand your responsibilities concerning tax file numbers and super contributions.
- Understand deduction limits and superannuation contributions.
When a worker ceases working for your business, their final payment will be governed by the nature of the termination. Employment can end for many reasons such as resignation, dismissal, redundancy, retirement, permanent disability or death. However, employment ends, it’s essential to follow the rules about the dismissal, notice and final pay. Please contact our office if you would like to discuss this further.