Payroll Tax - changes to 90 day 'deemed' employment from 1 July 2012

In 2007, Payroll Tax rules were harmonised across a number of jurisdictions, including NSW and Victoria. Now, the Office of State Revenue in NSW has published a new ruling, which takes effect from 1 July 2012. The ruling addresses the way '90 days' is calculated for assessing whether contractors will be 'deemed employees', or whether they will be exempt from the 'relevant contracts' on which payroll tax applies.

This distinction between ‘Contractors’ and ‘Employees’ attracts not only attention from the Office of State Revenue (OSR) when assessing a company’s payroll tax liability, but also the ATO and the Fair Work Ombudsman. Notably, these bodies share and cross reference data exposing a greater risk for non-compliant companies.

It is important for payroll tax to be calculated correctly and the correct treatment is applied, in particular to contractors. The payroll tax threshold for NSW is $678,000 for the 2012 Financial Year.

The OSR may assess ‘Contractors’ as employees for the purpose of payroll tax. The relative factors the OSR will consider in drawing the distinction between contractors and employees include:

• The right to control the manner of the performance of work of another
• Whether the person is performing  services which is an integral part of the company
• Whether the terms of the contract are consistent with the practical relationship between both parties
• Whether the contract focuses on the ultimate result or what must be provided during the performance of the contracted task
• Whether the worker is conducting a business on his or her own or actually participating in the business of the business operator
• The provision of equipment used
• Whether there are set hours of work
• Whether the worker has the power to delegate work or subcontract work to another person.

Organisations may wish to use this opportunity to re-assess overall risk in relation to their contracts. Audits and advice may be needed to factor in the different 'deemed employment' rules that apply for different purposes (eg, workers compensation, payroll tax, etc) and the 'sham contracting' risks arising under the Fair Work Act,

If you need any help in assessing your payroll tax liability or whether your contractors meet one of the exemptions listed above then please contact us at End2end Business Solutions.

Advantages of having workplace policies in place

What is a workplace policy?

Workplace policies are statements of principles and practices dealing with the ongoing management and administration of the organisation or business. Policies act as a guiding frame of reference for how the organisation deals with everything from its day to-day operational problems or how to respond to requirements to comply with legislation, regulation and codes of practice.

The need for effective workplace policies and procedures has never been more important than in today’s changing workplace. Creating formal policies and procedures allows you and your staff to make better decisions and also adds legitimacy to your decisions. Having an agreed process will allow you to reduce risk within your business, and can provide the following benefits to your workplace:

• It will help employees understand what is expected of them with respect to standards of behaviour and performance, and gives clear and defined boundaries that are consistent with the values of the organisation.
• It provides a set of rules and guidelines for decision-making in everyday situations for staff to easily refer to.  This can help maintain the direction of the organisation even during periods of change.  
• It allows you to demonstrate to your employees, and potential employees, that all employees will be treated fairly and equally, and it ensures uniformity and consistency in decision-making and operational procedures
• It can provide you with a documented and accepted method of dealing with complaints and misunderstandings to help avoid claims of favouritism or discrimination.
• It can set a framework for delegation of decision making in the absence of senior management or line management.
• It is a very useful means of communicating important information to new employees, and can clarify functions and responsibilities.
• If done properly, they can offer you protection from breaches of employment legislation, such as equal opportunity laws and other associated legislation.
• It can assist in assessing performance and establishing accountability.

 A workplace policy should:

•  set out the aim of the policy
•  explain why the policy was developed
•  list who the policy applies to
•  set out what is acceptable or unacceptable behaviour
•  set out the consequences of not complying with the policy
•  provide a date when the policy was developed or updated.

Policies also need to be reviewed on a regular basis and updated where necessary. For example, if there is a change in equipment or workplace procedures you may need to amend your current policy or develop a new one.

Employment law changes, changes to your award or agreement may also require a review of your policies and procedures. Stay up to date with relevant changes by regularly checking Fair Work Online [Fair Work Ombudsman]

Types of workplace policies

Here are some examples of common workplace policies that could assist your workplace:

• code of conduct
• recruitment policy
• internet and email policy
• mobile phone policy
• non-smoking policy
• drug and alcohol policy
• health and safety policy
• anti-discrimination and harassment policy
• grievance handling policy
• discipline and termination policy
• using social media.

Online Health and Safety Induction information package

Are you compliant with Health and Safety Laws?

Our new online information package covers all areas of health and safety induction for industry through :

• Branded & customised questionnaires with mini assessments to ensure the training is delivering results;
• Service remote sites & multiple divisions from a central location;
• Provide access to as few or as many managers as you like;
• Collect & store inductee details;
• Receive reports on course & question effectiveness;
• Pre‐qualify contractors into your HSE system
• 1800 number for support

Contact us today! 

Unpaid Trials and Probation

Occasionally, when a person is applying for a new job, they may be asked to work for a trial or probation period. There is a good reason behind this – it gives both the prospective employee and the employer a real ‘on the job’ chance to evaluate if the new employee is the right fit for the job and the business.

Trial and probation periods are differentiated by the length of time of each – a trial period is usually only for a brief period of time, while a probation period will be set by the employer and will usually last for between 3 to6 months.

A probation period is a period when the employer assesses the suitability or otherwise of a new employee on his ability in doing the job he has applied for. It is used to assess the capabilities and skills to complete the job as defined in the job description,  and that the new worker is a good fit in to the organisation.

In a probation period, a worker is entitled to all wages and conditions of employment as per the award and the National Employment Standards during a probation period. In a trial period of work, the employee should be employed as a casual and must be paid for a specific number of hours of work. Unpaid trial work is illegal.

As a general rule, if someone is doing productive work for a business, they need to be paid wages.

The employer must notify the new employee, preferably in writing, of the length of the probation or trial period. Additionally, the new employee must be paid for any training the employer requires them to do and the employer must pay for the cost of the training course.

The only exception to this is for work experience (usually 2 – 4 weeks), which does not require payment during the set time. Similarly, volunteer work for a charity or not-for-profit organisation does not get paid.

If you need any help understanding trial periods, probation periods or wages, please contact Annette on  (02) 8977 4002 for a customised solution.

Upcoming Australian Human Resources Institute Event - 24th October

Do your business outcomes drive performance pay? 

I am facilitating an Australian Human Resources Institute event on Oct 24, 2012,  that is directed at HR and remuneration people who are looking at variable pay to retain staff.

This event will be a facilitated debate about variable pay.
Topics covered:

• Setting goals at the beginning of the year still relevant 6 months in?
• Is the 2 speed economy is variable pay still a driver of performance?
• Key changes that have evolved and learnings that have arisen in variable pay
• Does performance pay drive performance or is it designed to share gain/pain
• Precision versus discretion in assessing performance
• Any unintended consequences
• Any lessons in choosing measures
• To what extent are the issues the same in various companies

This event is directed at HR and remuneration people who are looking at variable pay to retain staff.

The learnings are real examples of how variable plans have worked, not worked, what to do differently and what is around the market.

You will walk away with a improved knowledge of what is available in variable pay and the benefits.

Details:

Where: Saxons Training Facilities, Level 10 10 Barrack Street, Sydney NSW 2000

Date: 24 October 2012

Timings:

• Registration/Networking: 5.30-6pm
• Presentation start: 6.00pm
• Presentation conclude: 7.30pm

Facilitators
Name:Sarah Elliott
Position: Manager, Rewards
Company: CALTEX AUSTRALIA PETROLEUM PTY LTD

Name:Chris Hare
Position:General Manager Planning, Rewards and Sourcing
Company: NBN Co

Name:Warwick Adams
Position: Global Remuneration & Mobility Manager
Company: Xstrata Coal

Prices:
AHRI Members/Organisational Members $49.00
Non-members $75.00
AHRI Student Members $29.00

Drinks and light snacks provided
Registrations close 19 October 2012

Enquiries: email the AHRI events team or phone 03 9918 9200 

https://www.ahri.com.au/scripts/cgiip.exe/WService=AHRI-LIVE/ccms.r?PageID=16&CalendarCmd=Event&EventID=0x03160868&SearchPanelField01=New%20South%20Wales&SearchPanelField04=State%20Event

Special Offer - HR Advisory Service for SME's

This month we are offering a 10% discount on our 12 month SME Advisory package.

Normally priced at $1,500 ex GST, the SME Advisory Package offers small businesses a one- stop- shop for all their HR, Employment and Remuneration advice needs.

The Advisory Package addresses topics including:
> Disciplinary action for employees
> Termination of temporary & permanent contracts
> Remuneration issues
> Investigations
> Hiring recommendations
> Understanding a complex employment regulation
> Policy interpretation
> General employee relations issues

This package also includes 5 hours p/month of remote support, via phone, email or video conference and provides your business with the benefit of access to a Senior HR Specialist who can help resolve employee issues and questions in a cost effective and timely manner.

Contact Annette today on 8977-4002 to find out more, or click here to go to our website for details on the package.