Accurate, reliable payroll is perhaps at its most essential over the holiday period when staff are skeleton-thin in the office, correct interpretation of entitlements is at its most difficult, and even the ATO shuts down. The last thing a busy payroll manager wants is an emergency interruption to their well-earned break.
Each business or organisation has different needs over the holidays. Some close shop like their customers and partners, others gear up for the busiest time of the year. Take a look below at what you need to check-off before you put your feet up for the year.
Staff working less
If staff are focussed on boosting their bank balance over their work-life balance, then taking holidays may seem like an inconvenience. But from a productivity perspective, a proper break from work is essential to keeping creative minds fresh.
The awards or agreements covering your organisation’s employees will indicate the conditions under which they can take leave, and if they can be directed to take an amount of annual leave in advance of accrual, or unpaid leave. Don’t forget that public holidays don’t count as annual leave and don’t come off their leave balance.
You also can’t roster off an employee who should have been working on a public holiday to avoid paying them – if they would ordinarily have been working under their agreed employment terms, you’ll have to pay them for the holiday.
If they aren’t covered by an award or agreement, employees can be ‘reasonably’ directed to take annual leave. If they are covered, but it doesn’t cover annual leave during shutdown periods, an employee can’t be directed to take annual leave.
Staff working more
On the flip side, some employers call for all-hands-on-deck over the Christmas and New Year holidays, and they can ask their staff to work a ‘reasonable’ amount of overtime. But what’s reasonable depends on several factors, including what’s in the employment contract.
If a public holiday lands on a day a full-time employee usually works, they should be paid their base rate without any of the overtime or penalty rates they’d receive if they were a casual employee. If it’s a day they don’t normally work, then they don’t get paid for a public holiday. Then again, a full-time employee is paid for a public holiday if they’re on paid leave, but not for unpaid leave.
Make sure to check the public holiday rules applicable to your state. While most people are aware of the major festive season public holidays – Christmas Day, Boxing Day and New Year’s Day – most states have additional legislation governing how those days are paid, and adding half days or additional requirements on other days as well. For example, in SA, WA and Queensland, Christmas Eve attracts public holiday rates at specific times.
Navigating public holidays
Depending on the days a public holiday lands on, if your business operates weekly payroll runs, you might need to pay employees in advance to negate the effect of festive shutdown. Watch out for the half-day public holidays for Christmas Eve in Victoria, Queensland the Northern Territory.
The key here is for payroll teams to have enough lead time to plan properly for holiday period eventualities, which will likely just require the payroll timetable to be slightly advanced.
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Check for underpayments
This year some of the country’s largest employers and best-known brands like Woolworths, Rebel Sport and the ABC had sad histories of wage underpayment exposed to the world, alongside the usual suspects in hospitality, retail and agriculture.
Many employers have cited the complexity of Australia’s system of awards and agreements, with a range of different loadings and rates, and multiple clauses for different grades and types of employees, as the main reason for this high level of underpayment.
Even if your business has simplified payroll through Enterprise Bargaining Agreements (EBAs) and annualised salaries, you still need to ensure your staff are paid correctly by applying the current industrial relations rules and policies. If salaried staff work more hours overall – and more hours covered by a penalty rate – then the award mandated, they have grounds for wage recovery.
FYI: STP and NYE
ATO systems will progressively become unavailable during the Christmas and New Year shutdown period as they complete a major system upgrade from 12:00pm AEDT on Tuesday 24 December 2019. STP and electronic payments will not be visible until ATO systems are available in the New Year at 8.00am AEDT on Thursday 2 January 2020.
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This is Aurion wishing you a 100% compliant and accurate Christmas for 2019!
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