Changes to employee authorised deductions
From 30 December 2023, employees will be able to authorise salary deductions made by their employer that are recurring, or for amounts that vary from time to time. This means that employees will be able to make a single written authorisation that allows their employer to deduct amounts from their salary, even if the deduction amount varies each year. The deductions must still be principally for the employee’s benefit.
The amendments will protect employees by requiring any written authorisation for a deduction to include any information prescribed by the Fair Work Regulations. Varying deductions are prohibited if the deduction directly or indirectly benefits the employer, with limited exceptions.
The amendment will also ease the administrative burden on employees and employers, as currently, the FW Act does not allow for varying deductions, and requires a new written authorisation each time the deduction amount changes.
Employees can specify an upper limit when authorizing a deduction that may vary from time to time. The authorisation can also be withdrawn by the employee at any time in writing.
Superannuation to become a National Employment Standard
From 1 January 2024, superannuation will be considered a National Employment Standard (NES) under the FW Act.
Employers are already required to pay the superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 (Superannuation Act) if they do not make contributions to a superannuation fund for their employees.
Including superannuation into the NES will ensure that employees covered by the FW Act have an enforceable workplace right to superannuation as provided for under the Superannuation Act. Currently, employees that are covered by a modern award or enterprise agreement that includes a requirement for employees to pay superannuation can apply to a court to enforce such a term. Including superannuation in the NES will ensure more employees can enforce payment of their superannuation entitlements, instead of relying on the Australian Tax Office (ATO) to enforce compliance. It will also mean that an employee organisation or Fair Work Inspector can apply to enforce such a term for the employee’s benefit.
When the amendment to the FW Act comes into effect next year, the NES entitlement of superannuation will align with and refer to the Superannuation Act.
The ATO will still have primarily responsibility for ensuring compliance with the superannuation guarantee, and employees will continue to report superannuation underpayments to the ATO. However, the employee cannot use the NES entitlement of superannuation to recover unpaid superannuation through court if the ATO has already commenced legal proceedings to recover the same amount of unpaid superannuation.
The Fair Work Ombudsman will continue to be able to refer matters of unpaid superannuation to the ATO and may pursue unpaid superannuation in a complementary role to the ATO as an NES entitlement and pursuant to a term of an enterprise agreement, modern award or other industrial instrument.
For further information or if you require any assistance, please do not hesitate to contact our Workplace Relations, Employment and Safety team.
