More changes to Superannuation– are you ready?

A couple of years back, the Federal Government announced that it was making changes to Guaranteed Superannuation Contributions - these changes will finally come into effect on 1 July 2013. 

What does this mean for me and my business?

Compulsory superannuation contributions are made by employers of behalf of their employees. At the moment, the SG rate is 9% - this will rise to 9.25% on 1 July, followed by incremental rises each year until 2019, at which time the rate will be 12%. This is an obvious extra expense for SME’s to fork out to their employees and so far it looks as if we have to just cop it on the chin. According to the Cameron Research Group, SME’s are understandably worried about the increased cost of doing business in an environment where there is already pressure to increase wages in the face of a nationwide skills shortage.

To make matters worse, the Federal Government had initially promised a reduction in company tax on small businesses which would have negated the impact of the SG rise, but has since controversially backed out of this commitment leaving company tax at 30% instead of a staggered reduction to 28% as per the initial plan. They argue that the three years since the new super changes were proposed and the staggered rollout should give you enough time to make the necessary financial preparations in time to commence in July.

Hmmmmm... do you feel ready ? I'm sure that not everyone is!

Other changes due to come into effect on 1 July are:

• The age limit of 70 for SG contributions will no longer apply from 1 July 2013. Employers will be required to contribute to complying super funds of eligible mature age employees aged 70 years and older. The Government hopes that doing away with this age limit will encourage mature workers to stay in the workforce.
• Low income earners have an additional benefit – for those on less than $37,000 a year, the government will provide a low income superannuation contribution of up to $500 each

In another interesting move, while giving with one hand the Government has taken away with the other and halved the contributions cap for concessional (before tax) contributions to $25,000 for over-50s (previously $50,000 and had been set to increase to $55,000 before the Federal Government rethought this issue). The concessional contributions cap is now $25,000 for people of all age groups and here we were thinking that older workers were getting a break?!

Employers need to get ready now to implement these changes – so make sure you:

• Update your payroll and accounting systems to reflect the increase to the super guarantee rate.
• Continue to increase the rate you use to work out the super guarantee payments you make for your employees each year until 1 July 2019
• Ensure that you make super guarantee payments for eligible employees aged 70 years or over.

This week's blog was written by Caroline Ross, one of our capable team members.

Natasha Hawker owns Employee Matters Pty Ltd; an HR Consultancy that assists small to medium businesses with their HR functions to make them more efficient and profitable. Their offering includes HR Management, Recruitment, Training, Coaching, and Exit Management – find them at www.employeematters.com.au

The Five Most Common HR Myths

Employment Relations can be a complex area and, let's face it - it can be hard to keep up with all the legislation changes on top of everything else you need to stay on top of as a business owner.

Here are five of the myths that I hear from business owners:

I pay above the Award, so I don't have to pay overtime

As at 1/1/2010 with the introduction of Fair Work, there are now 122 industry Modern Awards. If you pay above the minimum wage, that is very nice of you, but I am sorry to say that it does not preclude you from all the other Award obligations contained within. For example many of the Awards now contain an obligation to consult when there is a major workplace change pending - this might include a restructure, change of office location or redundancy program.

Returning from parental leave - I need her full-time or I'll get her to resign

Prior to the introduction of Fair Work a woman could return to work on a part-time basis but was required to return to full-time when her 12 months maternity leave was up. This is no longer the case - the main carer can take 12 months unpaid leave with an option to request an additional 12 months. The main carer can also request Flexible Working on their return. This might take the form of part-time, reduced hours or job share to name a few options.

I don't need to pay redundancy

Previously unless you had a contractual right to a redundancy payment you were not entitled to redundancy. This also changed with the introduction of FWA. Now everyone across Australia is entitled to redundancy unless your business is classed as a small business - i.e. under 15 employees including casuals and part-time employees. However, the length of service is only calculated from 1/1/10.

I don't need policies or employment contracts, everyone knows the deal here

Employment contracts help protect your business, your clients and your intellectual property.  Employees feel more protected and secure with a contract. Policies enable you to ensure that your employees understand their legal obligations and the boundaries. It can make it easier to terminate an employee should you have cause. Policies and processes can improve productivity with consistent processes applied across the business

It's impossible to fire anyone for non performance

No, it is not, but you do need to follow a process to ensure that the termination is not ‘unfair, unjust or unreasonable. As an SME, you cannot afford to carry a non performing employee. The rest of your team will thank you for it.

Debunk these myths and you are in a much stronger position to maximise your productivity and profitability.

Let your fingers do the walking

When I'm sitting in the bus, I am always amazed at the numbers of people plugged in to iPhones, iPads and laptops - me too right now, as I am writing this blog, but it raises a concern in me for SMEs around the country - what is happening to all the information - the data being accessed, created and changed?

In this world of instant access and needing to do more with less time, our teams often work on the way to and from home, at home and even on holidays. For most businesses, this is a huge advantage as this is often discretionary work time and effectively unpaid - but what happens when employees resign or you need to terminate them either through redundancy or performance?

Have you collected the laptop, the files sent to the home email address, the USB sticks, the hard and soft copy files, the mobile messages not deleted...?

Have you changed the passwords, the security code to the building, have you collected the keys to the office? In most cases, the answer is some but not all. Do they still have a copy of the code of your latest app? All they need to do is rebuild it, because, hey, you didn't say they couldn't even if it is poor form!

Are your employees educated on the need to protect all company information when offsite, for example working on the bus or train. Are they aware of who is sitting next to them on the bus or who is listening to their mobile conversation about a client and the issues - by name, yes, there are some conversations that I could quote verbatim.

Here are five tips to protect you and your business:

• have a written exit process
• have a list of all equipment supplied to an individual and have the employee sign for it - once it's returned it can be checked off
• have a policy detailing protection of intellectual property and company-owned equipment - have a clause in your employment contracts about this
• complete an exit interview with employees who are leaving to learn about their experiences but also to reinforce their obligations post leaving the business
• all employees should know the company policies - get them to confirm this in writing 

You have worked too hard to let your critical data walk out of the business unprotected - not to mention the obligations that you have to your clients to protect their information.