by David Bates

A number of important changes to employment and superannuation obligations took effect on 1 July 2014. As a week has now already passed, it’s important you double-check and ensure your business is fully-compliant. Here’s a quick summary of the key changes and how they apply to you.

1. Superannuation
The compulsory superannuation guarantee (SG) contributions payable on ordinary time earnings (OTE) increased from 9.25 per cent to 9.5 per cent. It’s important to also note that further increases in future years will still proceed, but the timing of these increases will change as a result of amendments introduced this year by the Abbott Government.

The current 9.5 per cent rate is now expected to stay in place until 1 July 2018, when the first of five 0.5 per cent increases will then be applied. Collectively, these will result in the SG rate increasing to 12 per cent from 1 July 2022. Of course, this may change again as a result of future budgets, so watch this space.

2. Transitional Provisions
Thankfully, most of the Fair Work Act’s complicated (read: nightmarish beyond belief) transitional provisions ceased to apply as of 1 July. As a result, it’s generally no longer necessary to identify applicable pre-Modern Awards in order to determine current minimum Award rates of pay (I say ‘generally’ as there are unfortunately four remaining Awards where transitional rates apply).

This will come as a huge relief to long-suffering small business employers who have struggled for the past five years to determine the minimum rates payable to their employees. No doubt it will also be a relief for operators working on the often-criticised  ‘Fair Work Infoline’ who have themselves struggled to work through the complex transitional calculations needed to find a simple hourly rate of pay, not to mention ‘penalty rates’ and ‘loadings’.

3. Minimum Wage Increases
The Fair Work Commission’s Minimum Wage Panel delivered its 2014 minimum wage decision back in June. The Panel approved a three per cent increase in the National Minimum Wage and Modern Award rates of pay. It’s important to remember that if you’re already paying employees above the new applicable rates of pay, you don’t generally need to pass on any increase.

Remember too that as a result of these three per cent increases, the High Income Threshold has also increased to $133,000. If you’re currently using the High Income Threshold to prevent a Modern Award from applying to an employee, you’ll potentially need to now increase their salary to prevent the Award from kicking back in.

It’s worth taking some time now to make sure you’ve implemented any necessary changes to your business.