This week the JobMaker Hiring Credit passed through Parliament without amendment, but not without challenge. The concern from opponents was that the core nature of the scheme as one focused on addressing the burgeoning youth unemployment issue, was potentially discriminatory and that the construction of the program was open to manipulation that would see older workers suffer. After extensive debate the program has passed unchanged in recognition of the extensive safeguards that exist within the scheme. While the concerns over the nuance of advertising and filling JobMaker positions remains, the program is now live and providing support to businesses as they reopen and jobs to those who need it most. All employers are encouraged to understand the program, its detailed requirements and get ready now for the 7 December 2020 enrollment date.
What is JobMaker Hiring Credit?
The JobMaker Hiring Credit provides an incentive to businesses to hire additional young job seekers with a view to creating new jobs as the economy recovers.
Eligible JobMaker Businesses will be able to claim $200 per week (from 7 October 2020) for each Eligible JobMaker Employee that they employ in an Eligible JobMaker Job (new job) aged 16-29 years, and $100 per week for each aged 30-35 years.
Payments will be made quarterly in arrears through the Australian Tax Office. Payments will be made for 12 months from the date of employment, provided the Eligible JobMaker Employee is employed before 6 October 2021.
The Claims for the Credit must be equal to or less than the amount actually paid to the employee.
The first set of Claims for the JobMaker Hiring Credit will be able to be made through the ATO from 7 December 2020.
Safeguards and Penalties
The opponents to the program expressed serious concern that the program could result in businesses terminating older staff in favour of hiring younger staff in order to access the Credit. The safeguards that exist in both business and job eligibility within the program prevent such action. The requirement for a headcount and payroll increase ensures that such reprehensible moves would still not result in the business qualifying for the Credit. This, coupled with the extensive penalties for businesses that engaged in such behavior or in any other “scheme” to fraudulently obtain the Credit act as a strong safeguarded to ensure that the program achieves its aims without endangering other workers.
What is an Eligible JobMaker Business?
Businesses other than those that are; (a) receiving JobKeeper Payments, (b) in liquidation, or (c) have entered bankruptcy or are subject to the major bank levy, are eligible for the JobMaker Hiring Credit.
So if the business is receiving JobKeeper Payments, regardless of how many new jobs are created, or the age or status of the people who fill those jobs, the business WILL NOT be able to receive the JobMaker Hiring Credit. This is because this program stands alone.
In addition, in order to access the JobMaker Hireing Credit program the business will need to have an Australian Business Number, be up to date with tax lodgment obligations, be registered for Pay As You Go (PAYG) withholding, and be reporting through Single Touch Payroll (STP).
If the business is not excluded and meets the criteria for an Eligible JobMaker Business, the next question to consider is; Is the job eligible?
What is an Eligible JobMaker Job?
In order to be an Eligible JobMaker Job the Job will need to be NEW and at least 20 hour per week on average.
The first element is simple enought, the Job needs to be new. However the program is very specific in that the Job needs to represent an addition to not only the payroll of the business – that is the amount the business pays staff in wages in total, but also the headcount – that is the number of staff the business has in total.
The second element is also fairly clear; ion order to be eligible the Job must provide the employee with at least 20 hours per week (on average) for the 3 month period that the Credit will be claimed for. However, even this simple element has caused some question, particularly around the application of this element with respect to casual employees (see below for more information).
In summary and Eligible JobMaker Job on that is;
- Created after 30 September 2020
- Represents an increase in the number of staff compared to the number employed on 30 September 2020*
- Represents an increase in the payroll (PAYG) compared to that which was paid as at 30 September 2020
- At least 20 hours per week (on average) for the 3 month reporting period (240 hours at least worked in 12 weeks)
- Held by an Eligible JobMaker Employee (see below)
The business will also need to keep detailed records of the hours worked by the employee, along with all pay records, and complete the reporting requirements with the ATO.
*New businesses, that did not have a headcount of employees at 30 September 2020 will also be eligible with the base headcount set at one employee.
What is an Eligible JobMaker Employee?
One of the key elements of the JobMaker program is that it is targeted at young people who have been receiving job seeker assistance. In order to be an Eligible JobMaker Employee the employee must;
- Be within the age range (16-29 years Tier 1, 30-35 years Tier 2)
- Have received ‘assistance payments‘ in at least one of the three months prior to employment. ‘Assistance payments’ include; JobSeeker Payments, Youth Allowance (Other) or Parenting Payment
- Not be the subject of the JobMaker Credit in another business (one credit per person, not per business). Though the employee will still be eligible if they meet all the other criteria and are working for another business, as long as that business is not receiving the JobMaker Credit for that employee.
- Not be the subject of other Commonwealth Wage Subsidies
- Have completed the Nomination Form (as at 13/11/2020 the Nomination Form has not yet been released)
If the business is an Eligible JobMaker Business, the Job is and Eligbile JobMaker Job and the Employee is and Eligible JobMaker Employee then the question becomes one of practicalities.
Businesses are faced with questions of How do I know if the job is really new? What about casual employees and the minimum average hours? How can I advertise for a JobMaker position?
Like many of the programs that have been implemented throughout this pandemic, this program raises many questions, some of which we will not have the answers to until the program is in full flight, however, most can be addressed based on the program rules and similar programs.
Understanding Headcount changes
The Baseline Headcount – the number of employees the business had at 30 September 2020, is used to determine how many NEW jobs have been created. If the business did not exist on 30 September 2020, then the Baseline Headcount is said to be 1.
In the circumstance where the business headcount changes, the amount of positions above the Baseline Headcount are all eligible for the JobMaker Credit (as long as the business and employee is also eligible).
As an example;
- XYZ Fuel had 8 staff on 30 September 2020. That is their Baseline Headcount
- On 20 October 2020 the business hired 2 new staff into JobMaker roles (20h min, held by eligible employees)
- On 23 December 2020 one of the staff quit
- On 24 December 2020 the business hired a JobMaker replacement for the staff member that quit
In this example where the business creates 2 new jobs and is claiming the JobMaker Credit for both of those jobs, and one of the employees leaves the business, the business may employ another eligible employee and continue to receive the Credit for the second employee (provided that employee also qualifies).
This is because the Baseline Headcount in the business was X on 30 September 2020 and then was X+2 when the 2 new jobs were created. When the employee left it became X+1 so there is still the capacity for 1 position to be claimed in Credit, as it is still a job that is NEW when compared to the status of the business at the test date of 30 September 2020.
There are requirements on the business to report to the ATO the changes that have occurred and when.
The Baseline Headcount does change it will be adjusted up to ensure that only NEW jobs receive the Credit and only for 12 months after creation.
So if in our example above; as the 2 new jobs were created on 20 October 2020 the NEW Baseline Headcount will be 10, and only NEW jobs created in excess of that number will be eligible for the Credit.
Employment Compliance Concerns
The JobMaker Hiring Credit program is still relatively new, however there are several employment concerns and considerations that are likely to become more important over time.
Given the seriousness of these concerns it is important that businesses use caution in the application of this program, particularly when it comes to the recruitment and selection process.
- No Form
- While it is noted that employees are to complete a JobMaker Nomination Form, as at 13/11/2020 such a form has not yet been released.
- In addition to this issue there is the question of actually communicating the eligibility requirements to the candidates for a role.
- The JobMaker program was specifically designed to provide businesses with an incentive to create new jobs, jobs that they would not have created without the incentive. So it makes sense that the business would advertise the position as a JobMaker position and make employee eligibility for JobMaker a key criteria of the position, at least in the hiring process.
- This sensible approach however, throws up serious employment compliance and discrimination concerns. Is it even possible to stipulate age and previous government assistance receipt as a criteria of a role? What about when the Credit ends…if the position is contingent on JobMaker does the position cease to exist? Unions are calling for a guarantee to be made that hours will not be changed for the employee after the program ends.
- As businesses attempt to navigate these not inconsiderable concerns the Prime Minister has pointed to the other schemes that are based on age, including the Restart Wage subsidy, and has highlighted that there is no certainty other than that businesses need support and Australians need jobs and that this program is designed to support businesses to create jobs for the most vulnerable while we navigate the COVID-19 fall out.
- Minimum Hours…what about casuals?
- The JobMaker program requires the employee to have worked an average of 20 hours per week for the quarter being claimed. For permanent staff this is not an issue, however, casual staff are employed and engaged by the hour with no firm commitment to ongoing work and no guaranteed hours. It is not clear if the participation in the JobMaker program, and specifically the minimum hours requirement, could give rise to confusion over employment status.
It is clear that over time as disputes arise and are addressed, more clarity will come, however, in the mean time ACAPMA advises Members to be open and transparent with candidates and employees.
Advertising a JobMaker role
This advice may change, however at this point in time, with the very limited practical guidance available, a best practice approach to job advertising is advised
Transparency is encouraged, but so is openness to candidates of all types and ages – it is simply best practice to recruit based on fit and skill, and it is in the best interest of all businesses to assemble the best pool of talented and motivated staff they can as a primary focus.
- When advertising the job outline that it is a JobMaker position;
While this is a newly created role under the JobMaker Program
- MOST IMPORTANTLY – Remain open to other candidates. If there is churn in the existing staff numbers, those positions will not be JobMaker positions, they will not count as NEW jobs and as such will not be eligible for the Credit, so it is simply sensible to keep an open call approach to all advertising. In addition to creating a detailed list of motivated local job seekers to call on in the event of an opening, this approach also allows for the possibility that a suitable JobMaker candidate may not present themselves.
, the business encourages applications from all persons (including those who may not qualify for JobMaker). This position will be awarded based on fit and merit and candidate details will be retained and considered for the other existing job vacancies the business has now and may have in the future. For more information about the JobMaker Hiring Credit see; https://budget.gov.au/2020-21/content/factsheets/download/jobmaker_hiring_credit_factsheet.pdf)
JobMaker Hiring Credit program is new, and more information is coming regularly.
To view the Government Fact Sheet see; https://budget.gov.au/2020-21/content/factsheets/download/jobmaker_hiring_credit_factsheet.pdf
Here to Help
ACAPMA’s Employment Department is available to assist members via firstname.lastname@example.org
The above is provided as general advice and you should seek further advice on your particular situation by emailing email@example.com to reach one of the ACAPMA Workplace Relations Professionals, its free for members.
Elisha Radwanowski BCom(HRM&IR)
Executive Manager Employment and Training