Are your Payroll and HR Departments ready for the New Financial Year?

As businesses around the country prepare for the end of the financial year, experts are warning organisations they need to be aware of the legislative changes that will come into effect on July 1.

A raft of new legislation including paid parental leave, unfair dismissal thresholds, new minimum wage requirements and award increases will be introduced on Friday, and according to industry experts many companies aren't prepared.

Speaking to SmartCompany, Alison Baker, Partner at Hall & Wilcox advises, “Many employers will need to get cracking and get the right advice about the paid parental leave obligations. There's not much time left."

Here are some of the new legislative requirements businesses will face:

Minimum Wage Increase The $19.40 per week increase on the minimum wage comes into effect from July 1. Employers need to ensure they meet all necessary pay requirements and update their payroll schedules to ensure employees are not underpaid.

Modern Award Increases The recent 3.4% increase in modern award wages, handed down by Fair Work Australia (FWA) will take effect from the first pay period to start on or after July 1. Revised modern awards which include the increased wages will be available on the FWA website.

National Paid Parental Leave Scheme While the Paid Parental Leave (PPL) Scheme was introduced at the beginning of this year, this was only the first stage of a two-phase introduction.

Government processing of the Scheme expires on June 30, so from July 1 employers will be responsible for processing the payments (18 weeks' pay at the national minimum wage to eligible employees who have or adopt a child from that date).

Under the Scheme, employees are obligated to request the benefit from the Family Assistance Office (FAO). Once the FAO is satisfied the employee is eligible for the benefit, it contacts the employer to say the employee has submitted an application, met the criteria, identified them as their employer. If the employer agrees with the application, they then need to provide the FAO with their bank and pay cycle details. The FAO then makes the payment to the employer, who passes it onto the employee.

Baker advises employers to ensure they have processes in place for dealing with the PPL scheme and to be aware that any existing parental schemes they have will also need to be paid.

Still confused? Centrelink have compiled a Paid Parental Leave Toolkit designed to assist employers and HR staff in preparing for their role in providing PPL to their eligible employees. You can download it by clicking here.

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Employers to run Paid Parental Leave Scheme through their Payroll or risk large fines

Aussie businesses could face fines of up to $33,000 if they fail to run the government's new paid maternity scheme through their payroll.

Thousands of mothers have applied for the $570-a-week paid parental leave scheme since it was introduced on January 1, according to new figures released by Families Minister Jenny Macklin.

Faced with a choice between the paid parental leave scheme offering up to $10,000 to working mums and the $5000 baby bonus, available to stay-at-home mums, eligible parents are flocking to the new scheme, with over 15,500 families lodging applications to date.

But small business groups are fighting back over demands they administer the scheme after July 1, with a legislative showdown brewing as Parliament resumes. They advise that many employers’ simply are not aware of the scheme and the potential fines they could face for failing to comply.

MPs will vote on Coalition reforms to force the Gillard Government to instruct Centrelink to keep running the scheme.

Ms Macklin told Sunday Herald Sun she was determined to see the scheme administered by business rather than Centrelink. "Paid parental leave is a workplace entitlement, just like annual leave or sick leave," she said.

"Our scheme helps employers retain skilled and valuable staff...It's important for women to maintain a connection to the workplace.”

"Employers will pass on Government-funded parental leave pay to their long-term employees through the employee's usual pay cycle and will receive the funds from the Government in advance," she added.

But the Opposition’s Small Business Spokesman Bruce Billson said: "It's an unnecessary burden on small business and exposes employers to big fines."

The Council of Small Business of Australia (COSBA) Executive Director, Peter Strong, said there was little explanation for the red tape other than a philosophical view that the maternity payment should be a workplace entitlement rather than a welfare payment.

"It's about time the Government funded paid maternity leave and that's great, but we don't want to be the paymaster," he said.

Parents can apply for the taxpayer-funded scheme up to 3 months before the birth of their child and can take it in conjunction with, before or after any employer-funded leave. It is taxed but can also be transferred to fathers if mothers return to work early.

(Sources: Sunday Herald Sun and Payroll News)

New Coalition may result in an extension to the benefits offered by the Paid Parental Scheme

With the Labor Party back in power, they have renewed their commitment to complement benefit enhancements under the new Paid Parental Leave Act.

Sussan Ley, the Federal Coalition's new childcare spokeswoman, says she would like the party's 26-week paid parental leave scheme to remain part of its policy platform.

However, some Coalition MPs have expressed concern about the scheme's generosity, advising the Liberal Party that they prefer its more generous parental leave proposal to the Paid Parental Leave Act and will give it a majority on "any policies on which they agree.”

Ms. Ley says she will consider any changes proposed by her colleagues, but believes the general structure of the scheme is sound. She said, "I am extremely supportive of the current proposal and I know members of the Coalition are".

The future of Australia’s industrial relations and paid parental leave policy hangs in the balance

Following the weekend’s hung parliament, HR professionals eagerly await the news of a potential new Government, which is likely to impact on both IR laws and also the much-debated paid parental leave scheme.

However, constitutional law experts have advised that negotiations over the next Federal Government could drag on until the end of November.

Professor Donald Rothwell from the Australian National University's College of Law, said parliament must meet within 30 days of electoral officials confirming the names of each candidate elected but the commission had until October 27 to do this.

"This could allow Prime Minister Gillard to convene the House of Representatives as late as 26 November 2010, thereby allowing for as long as three months for agreements to be reached with the independents," he said.

Rothwell advised that Gillard could remain as caretaker prime minister until then.

Prior to the election, Prime Minister Julia Gillard announced that Labor would offer new fathers two weeks parental leave if re-elected, in a bid to win over undecided working families. Labor's full parental leave scheme now offers mothers 18 weeks leave at minimum wage. However for working families this still appears less attractive than the Coalition's scheme which offers 26 weeks at the mother's real wage, up to a cap of $150,000.

Australia waits....

Australian Business one step ahead of the Paid Parental Leave Debate

An article on ninemsn reports that while the major political parties battle over paid parental leave policies in the run up to Saturday's election, Australian employers are already offering some form of paid parental leave.

According to the Paid Parental Leave Pulse Survey conducted by Hewitt Associates last month, 71 percent of the organisations surveyed already offer fairly generous paid parental leave, with 36 percent given 12 or more weeks.

However, some are not yet sure how to address this issue, with over half (57 percent) of the respondents undecided about what changes they will make to their paid parental leave policies.

Tim Powell, Hewitt Associates Managing Director for Australia and New Zealand, said: “As the major political parties battle-it-out on paid parental leave policy, a third of companies are waiting for the election outcome before they commit to implementing company policy”.

Nevertheless, Powell advises that Hewitt’s research has found that on the whole, Australian businesses lead the way in recognising the role paid parental leave plays in retaining an experienced and motivated workforce.

“This survey has found that irrespective of federal policies and politics, the majority of Australian corporates are already offering paid parental leave; seeing it as a competitive advantage to attract and retain talent in an increasingly tight labour market”.

“However, with different timeframes being thrown around by the Coalition, Labor and the Greens, some organisations are unsure of what best practice is and how to implement it.”

“Depending on the outcome of the coming election, we expect these companies will review paid parental leave policies and payments, to maintain this as a differentiator beyond what will be required under federal legislation.”

For more information on Hewitt Associates or to access their reports see: http://www.hewittassociates.com/Intl/AP/en-AU/Default.aspx

Mitrefinch’s Time and Attendance system is a powerful tool for analysing and managing employee time and the associated costs. Record unplanned absences, holidays and paid parental leave, building a yearly absence profile for further analysis. A built-in current and projected manpower planner allows management to act or plan work schedules according to available resources, skills sets etc...

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