JobKeeper 2.0: New turnover test for legacy businesses reducing hours

Businesses that are kicked off JobKeeper at the end of September will still be able to reduce worker hours by up to 40% if they’re able to prove their revenue is still suffering amid the COVID-19 pandemic.

The new measure, contained within a JobKeeper extension bill circulated yesterday afternoon, will maintain some emergency workplace provisions for thousands of employers even after they stop receiving wage subsidy payments, while those continuing to access the program will retain access to a full suite of powers legislated earlier this year.

JobKeeper will enter phase two at the end of September, with tighter eligibility rules to drastically cut the number of businesses receiving wage subsidies and lower payments on offer.

There had been disagreement among legislators about whether the extended program would allow those kicked off JobKeeper to retain a suite of extraordinary workplace powers — including the ability to reduce hours, adjust work duties, alter work locations and agree to changes in work times — brought in to enable businesses to “hibernate” through the pandemic.

Attorney-General Christian Porter appears to have landed on a compromise with Labor and will table legislation in parliament later this week that will pare back but not completely strip businesses of these powers if they lose access to JobKeeper.

Under JobKeeper 2.0, legacy employers which can prove their turnover fell at least 10% against a relevant quarter last year will still be able to cut worker hours up to 40% of their ordinary hours.

These businesses will have to provide staff with seven days notice of changes (an increase from three days), and won’t be able to ask them to work less than two hours each day.

Laws which empowered JobKeeper employers to seek agreement with staff to draw down on their annual leave will also be dumped under phase two.

Porter said the government wanted to maintain workplace flexibility for employers recovering from the coronavirus crisis.

“These changes are time-limited. They are not permanent changes. They are linked to the extension of JobKeeper until the end of March 2021,” he said in a statement.

While the new laws are a result of consultation with the opposition, Labor has still not officially committed to supporting the new legislation, having called on the Morrison government to go further and maintain the $1,500 a fortnight rate that’s been offered under the program so far.

But Finance Minister Mathias Cormann balked at that suggestion on Monday, telling the ABC that businesses needed to be weened off the payments and begin paying their workers themselves.

Opposition Small Business Spokesperson Brendan O’Connor said the government should not be cutting support for small businesses while tough trading restrictions remain in jurisdictions such as Victoria.

“You shouldn’t be cutting payments down and then creating a cliff in March, I don’t think that’s enough support for our economy,” O’Connor said.

The Morrison government has extended the JobKeeper program several times since it was first announced in late-March, but at about $100 billion, the latest projected cost of the wage subsidy program is still well below the $130 billion originally earmarked.

NOW READ: Employers granted extraordinary new powers under Morrison’s $130 billion JobKeeper scheme

NOW READ: JobKeeper 2.0: Finance Minister rules out maintaining $1,500 rate