Retirement
Employers call for pragmatic safeguards to ensure Payday Super reform succeeds
Retirement
Employers call for pragmatic safeguards to ensure Payday Super reform succeeds
Employment Hero chief executive Ben Thompson has urged the federal government to introduce a phased rollout and reciprocal safeguards to support small businesses as the Payday Super reform approaches implementation.
Employers call for pragmatic safeguards to ensure Payday Super reform succeeds
Employment Hero chief executive Ben Thompson has urged the federal government to introduce a phased rollout and reciprocal safeguards to support small businesses as the Payday Super reform approaches implementation.
Mr Thompson said the proposed reform — which will require employers to pay superannuation contributions at the same time as wages — must “succeed the first time” to avoid operational and financial disruption across the small-business sector.
“Payday Super is a reform that must succeed the first time. If execution falters, workers miss out and employers wear the cost,” Mr Thompson said.
“Employment Hero supports the Bill and is leading in the development of the infrastructure and resources for compliance. Still, the current settings expect employers to bear the full operational and cashflow impacts on day one, while the rest of the system on which employers rely is still being upgraded.”
According to Employment Hero’s modelling, the average small and medium-sized business will require around $124,000 in additional working capital under Payday Super.
Mr Thompson said that with less than 12 months before the deadline and no phase-in period for smaller employers, many remain uncertain about how to comply.
“That’s out of step with past reforms, like STP, FDV leave and Paid Parental Leave that recognise the realities of running a small business,” he said.
He warned that employers could face penalties for delayed payments caused by third-party fund or gateway errors, exposing small businesses to fines and compliance risks beyond their control.
“Payday Super should proceed with two pragmatic safeguards to ensure it succeeds: a short phase-in for the smallest employers and reciprocal obligations on funds to reduce the risk of penalties for businesses for delays they cannot control,” Mr Thompson said.
“These small but practical changes to the Bill will help the reform succeed, protecting workers’ retirement savings while supporting the viability of Australia’s small businesses.”
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