2016 FACCI WA Business Seminar Employment law and Director s duties

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1 2016 FACCI WA Business Seminar Employment law and Director s duties

2 Guest Speakers Susan O Brien Senior Associate, Lynn and Brown Lawyers Emmanuelle Roulet Corporate Tax Consultant, Pitcher Partners

3 Lynn & Brown Lawyers Susan O Brien Senior Associate Employment Law and Directors Duties

4 FACCI WA 15 June 2016 Employment Law and Directors Duties

5 Guest speaker Susan O Brien Senior Associate Lynn & Brown Lawyers susan@lynnandbrown.com.au Tel: (08)

6 Workplace Laws in Australia Cth Fair Work Act 2009 (including the NES) Work Health and Safety Act 2011 Modern Awards WA (being one of 6 Aus states) Industrial Relations Act 1976 Minimum Conditions of Employment Act 1993 Occupational Safety and Health Act 1984 Workers Compensation and Injury Management Act Other Regulations applying to Acts/Statutes Common law provisions

7 Status of workers Important to select the right status for your workers. Examples: Casual (long term casual) Temporary or permanent Part time or Full time Fixed term Contractors?

8 Case scenario Casual status Mr Ponce, a casual traffic controller worked as a casual for approximately 21 months. His times and dates of work were not determined by a published roster and availability was a strong pattern. Although there was no fixed roster, his supervisor would always inform him when his next shift would be, and Mr Ponce nearly always accepted the shift that was offered to him. On average, he would work over 30 hours per week. Question Can Mr Ponce take an unfair dismissal claim if he is not given further work? Why? Ponce v DJT Staff Management Services Pty Ltd t/as Daly s Traffic [2010] FWA 2078

9 Legal issues to be aware of 1. What if the legal status of the work type has changed without my knowing it? e.g. casual labour hire worker placed on a fixed fly in fly out roster See Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321

10 Legal issues (continued) 2. Is the potential employee allowed to work in Australia? 3. Does the worker hold a relevant working visa? 4. Does the worker hold the correct skills and experience for the role?

11 5. Workers Compensation This is a separate field of legal practice in itself. An employer must ensure that it is covered by insurance for every worker (including casuals). WorkCover WA is the government agency which deals with Workers Compensation claims See

12 Directors Duties Directors manage the business operations for a person conducting a business or undertaking (PCBU) Under Australian Work Health and Safety legislation, directors are required to ensure that PCBU s know their obligations under the work health and safety laws. Directors of course are the mind and brains of a company and may therefore be legally liable, along with the business entity, for any breach of workplace or health and safety laws.

13 Summary Australian industrial relations law is complex Get professional advice early Find out your legal obligations as an employer/pcbu Work out what type of workers you require Do valid pre-employment checks Record your arrangements in writing Prepare and retain adequate records Review and update your records regularly

14 Questions & Discussion

15 Workplace Law Contracts and General Workplace Advice Dispute resolution and litigation Restructuring and redundancies Defending Health and Safety prosecutions Legal compliance audits Investigations Policies and Procedures Strategic Advice

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17 Pitcher Partners Emmanuelle Roulet Corporate Tax Consultant Employing Staff in Australia: Tax Implications and Planning Opportunities

18 Employing Staff in Australia: Tax Implications and Planning Opportunities Emmanuelle Roulet 15 June 2016

19 Firm Profile Accountants, Auditors and Advisors National association of independent Australian accounting firms with offices in Perth, Sydney, Melbourne, Brisbane, Adelaide and Newcastle. Independent member of Baker Tilly International We are large enough to meet the challenges faced by clients of multinational firms and yet our flatter structure allows us to maintain close and personal involvement with clients and each other. 19

20 Our global reach International expertise 30 North American firms 58 European firms 161 Member firms 137 countries Asia Latin American firms Middle East and African firms 23 Pacific firms 20

21 What we do Full service firm providing: Audit and Assurance Services Business Advisory Services Taxation Services Corporate Advisory and Transaction Services Business Recovery and Insolvency Services Private Clients Superannuation Risk Services 21

22 Agenda Employee vs Contractor Temporary residents of Australia Fringe benefits tax and salary sacrifice Payroll tax Superannuation Reporting obligations 22

23 Disclaimer This is a document for discussion purposes only. This document does not constitute advice. This document is not intended (or provided) by this firm to be used, and cannot be used, by any person for the purpose of marketing, promoting and/or recommending to another person any of the matters it covers. This document has been prepared by us in the ordinary course of our profession. In providing this document, we are not purporting to act as solicitors or provide legal advice. Any information contained in this document is provided in the ordinary course of and as a reasonably necessary part of the adviser s activities as a registered tax agent and does not constitute financial product advice. This is a draft document for discussion purposes only. Please read in conjunction with the disclaimer 23

24 Employee vs Contractor Different tax treatment for employees and contractors PAYG withholding Fringe Benefits Tax Superannuation obligations Look at whole working arrangement Penalties and charges may apply if treated incorrectly 24

25 Temporary residents Broadly, include holder of temporary visa under the Migration Act 1958 (without an Australian spouse) Employer may be liable to pay for superannuation contributions (except if social security agreement) Employer may be liable to training fund contributions Employee taxed at same income tax rate as resident but concessions available: Generally, foreign income not taxed in Australia (except for foreign employment income) No capital gains tax except if asset is taxable Australian property 25

26 Temporary residents - cont. Reducing Australian tax Consider the superannuation exemption rules for employees from countries with social security agreements with Australia Maintain investments outside of Australia Claim exemption from the Medicare levy Salary packaging (discussed later) Super can be claimed back by employee on permanent departure of Australia 26

27 Fringe Benefits Tax (FBT) Tax paid by employers on certain non- cash benefits provided to employees and their associates 49% rate for 2016 and 2017 Various type of fringe benefits car, car parking, entertainment, expense payments, loan, etc Also includes business related benefits not taxable but reportable Cost of benefit and FBT deductible for income tax Annual FBT return FBT year runs from 1 April to 31 March 27

28 Fringe Benefits Tax (FBT) cont. Reducing FBT liability Provide benefits that are exempt from FBT Relocation costs Portable electronic devices Minor FTB exemption Provide benefits with no taxable value (i.e. otherwise deductible or reduced by employee contributions) E.g. tools of trade, briefcase, protective clothing Provide fringe benefits taxed at concessional rates Cars under the statutory formula method Consider cash allowance instead if lower marginal tax rates 28

29 Salary Sacrifice arrangements Employee forgoes part of their future wages in return for non- cash benefits provided by the employer Tax savings achieved by buying the benefit in pre- tax dollars Benefits exempt from FBT or with no/reduced taxable value Most common form of salary packaging items: Car fringe benefits Expense payment fringe benefits Living away from home allowance Car parking fringe benefits Superannuation. 29

30 Superannuation Contributions made by employer into a super fund of the choice of the employee to cover their retirement Current rate of 9.5% scheduled to gradually increase to 12% by 2025 Deductible for income tax if paid on time to complying super fund Super guarantee charge Concessional super contributions to employees through salary sacrificing Super stream system to be used by all employers by 30 June Budget introduced new super changes 30

31 Payroll Tax Tax assessed on wages paid by an employer Thresholds for liability and rates vary in each State In WA: employer must register if total Australia- wide wages exceed $800,000 per annum ($850,000 from 1/7/16) No tax payable on first $66,667, rate of 5.5% on WA wages after that Reduce payroll tax by: Claiming exemptions and exclusions where applicable Wages to apprentices and trainees Workers compensation payments Disability wages Parental, emergency services & defense force leave Avoiding penalties by improving compliance 31

32 Reporting obligations The Pay- As- You- Go withholding system Periodical activity statements (BAS, IAS) Annual PAYG payment summary to be provided to employees (by 14 July 2016) Annual PAYG report to be provided the ATO (by 14 August 2016) 32

33 Questions

34 Thank you

35 Thank you and merci!