The most important asset in many, if not all businesses, is the people that are the face and/or engine of your business.
Yes your staff!
In these unprecedented times we are seeing rapid changes to business conditions creating massive pressure on being able to retain our staff. This is recognised in the government’s policies, they are not only providing unprecedented income support for employees they are providing it through their employers so that the employer/employee connection is not severed (logistically this suits the government but it is also a smart way to roll out the help, it keeps businesses functioning rather than twiddling their thumbs!).
Life (and not just businesses) are truly facing a 1st with Covid-19.
So what options does an employer have during these times?
1.Suspend staff: effectively they are in a state of limbo similar to the business.
They are still employed, not being paid (unless you pay them their annual leave or LSL) and ready to start up again when the business does.
Your staff will have no income but Centrelink and the Job keeper payments may assist eligible persons.
2. Convert full-time staff to Permanent Part-time: many businesses have reduced staff from 5 days to 3 days work with staff free to perform those 3 days over 5 days if desired.Staff are paid for the reduced hours they work, they still accrue entitlements.
Your staff have less money but they still have their job. They may be eligible for the Job keeper payment depending on their earnings etc.
3. Redundancy: staff are terminated, they are no longer employed and you have to pay them their entitlements.
Which option suits your business is the subject of individual tailored advice, call VJC (or your business adviser) to discuss.
As Covid-19 changes our world as a business you want to:
- Survive this storm.
- Keep clients and staff connected to your business.
- Be ready to emerge and scale up once the storm passes.
So consider your options and talk to your business advisory expert,now more than ever advice is crucial so you have an independent, objective voice in your corner. It’s the best money you will spend.
The Job Keeper payment is supposed to have commenced, it is yet to be legislated (Wednesday), the guidance on the treasury fact sheets is good but not complete. It is not easy to roll out a new measure at speed and have every question and scenario covered so people should assume that there will be some leniency and latitude. If you do not get the implementation right 1st time I genuinely believe the intention of the government is to help people not hinder them receiving payments. Briefly issues include:
- Some businesses cannot fund this payment and getting a loan as suggested is just not real. They need to receive the payment then pay the money to staff.
- Can the pay run be raised and lodged through STP and then paid when the money is received?
- Some businesses are confused about eligibility, you have already experienced a 30% drop in sales or you expect you will. What if you estimate the later incorrectly?
Implementation is always harder than the construction of the idea, the pace this measure emerged was so fast this was bound to happen. Again that’s why you need a good business adviser.
The last word: Everyone has ideas but there are only few that can make them happen, the implementation is the hard part. That’s why there are only a few businesses like Facebook, Amazon, Apple, Microsoft etc.
Call us if you would like to discuss.
Adrian and the VJC Team
General Advice warning: the information in this article is general in nature, it is not advice specific to your needs. If you want to act upon the information in this article then you should seek advice from a qualified professional. VJC WM accepts no liability to any party for acting from this information unless they have sought advice in a formal engagement with VJC WM for this purpose.
