The Australian Government has recently introduced new legislation, the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023, which brings about significant changes to the Fair Work Act. These changes aim to protect worker entitlements and improve the rights of employees across the country. It’s important for employers to be aware of these changes and understand how they may impact their payroll processes. In this article, we will discuss three key changes that employers should take note of.
- Right to superannuation in the National Employment Standards (NES)
Starting from 1 January 2024, the National Employment Standards will include a right to superannuation contributions. This means that employees, employee organisations, and the Fair Work Ombudsman can enforce unpaid or underpaid superannuation under the Fair Work Act. Employers are already obligated to pay superannuation contributions for eligible employees under existing superannuation guarantee laws. As long as employers fulfill their obligations under these laws, they will not be in contravention of the NES provision. The Australian Taxation Office (ATO) will continue to be responsible for ensuring compliance with employer obligations regarding superannuation guarantee laws.
- Changes to unpaid parental leave
Effective from 1 July 2023, the Fair Work Act will introduce greater flexibility for employees taking unpaid parental leave. This change aligns with updates made to the Paid Parental Leave scheme. Employees will now be able to take up to 100 days of their 12-month leave entitlement flexibly within the 24-month period after the birth or placement of their child. This is a significant increase from the previous entitlement of 30 days. Pregnant employees will also have the option to access their flexible unpaid parental leave up to 6 weeks before the expected date of birth. Additionally, employees will no longer be restricted to taking a maximum of 8 weeks of unpaid parental leave concurrently with their spouse or de facto partner. Both parents can now take up to 12 months of unpaid parental leave within 24 months of their child’s birth or placement, with the possibility of applying for a 12-month extension beyond the initial leave period.
- Authorised employee deductions
Commencing on 30 December 2023, employees will have the ability to authorise recurring salary deductions from their employers, even if the deduction amounts vary over time. Previously, a new written authorisation was required each time the deduction amount changed. Under the new legislation, employees can provide a single written authorisation that allows their employer to deduct varying amounts from their salary. The employee retains the right to withdraw this authorisation in writing at any time. It’s important to note that deductions for specific amounts only can still be authorised if they primarily benefit the employee and are provided in writing.
As an employer, it’s crucial to review and update your payroll processes to ensure compliance with these new Fair Work Act changes. Familiarise yourself with the details of the legislation and seek professional advice if needed. By staying informed and implementing the necessary adjustments, you can ensure that your business remains compliant and continues to prioritise the rights and entitlements of your employees.
