How to deal with a reduction of business during COVID-19 pandemic? Can I impose a reduction of working time to my employees?
Businesses in Australia may be able to stand employees down during the coronavirus pandemic and government restrictions being in place. It may be necessary to do so where:
- Government restrictions require the closure of the business;
- a large proportion of the workforce is in self-quarantine;
- work cannot be performed due to lack of suppliers; or
- where permitted under temporary amendments to employment legislation.
Businesses may also consult with their workforce to implement more flexible work arrangements during the crisis, including reducing hours or increasing hours.
The Australian Federal Government has introduced a number of measures to support business and keep people employed. Two key measures introduced by the Government are the JobKeeper Subsidy and the Cash Flow Boost for Employers.
The Australian Federal Government has committed $130 billion in ongoing support to business through the JobKeeper subsidy. The payment is available to businesses that are suffering a reduction in turnover to keep Australians employed during the outbreak. The JobKeeper subsidy is a gross fortnightly payment of $1,500 for each eligible employee for a 6-month period from 30 March 2020. The full $1,500 payment is to be paid to each eligible employee, either as a partial subsidy if their wage is greater than $1,500, or as a full subsidy if their wage was previously less than $1,500. The gross payment will be taxed at normal rates, although employers are not obliged to make additional superannuation contributions.
The scheme includes sole traders as well as businesses and not-for-profits (NFP).
Boosting Cash Flow for Employers
Small and medium businesses, as well as NFP are eligible for cashflow boosts to further assist in retaining employees. Tax-free cash flow boosts of $20,000 to $100,000 will be delivered to eligible businesses and organisations with aggregated annual turnover under $50 million. In a series of two payments, each payment will be equivalent to the business’ withheld salary and wages, with a minimum of $10,000 and maximum of $50,000. The first cashflow boost is set to be available between March and July 2020; the second boost will be made to businesses who received the first and will be of an equal sum, to be paid between June to September 2020. By splitting the support into two equal payments, the intention is to provide continued cash flow support over a longer period – increasing confidence and assisting businesses to maintain their operations.