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New gift card laws for businesses

New gift card laws for businesses

You’ll need to comply with new laws which came into effect from 1 November 2019.

If your business sells gift cards or vouchers you’ll need to comply with new laws which came into effect from 1 November 2019.

What are the new legal requirements?

The key changes of the new gift card laws are:

  • a mandatory minimum three year expiry period from the date the card is sold to a customer
  • gift cards must clearly show the expiry date
  • most post purchase fees can no longer be charged, including activation fees, account keeping fees and balance enquiry fees

The new laws apply to all gift cards and vouchers sold from 1 November 2019 onwards. Any gift card sold before 1 November 2019 date will continue to carry the same expiry period and fees as applicable at the time of purchase.

What is include and excluded?

The new law applies to all gift cards or vouchers sold on or after 1 November 2019, unless specifically excluded. This includes gift cards for online stores that trade in Australia.

The three year requirement does not apply to gift cards that are:

  • able to be reloaded or topped up
  • for a good or service available for a limited time where the card or voucher expires at the end of that period
  • supplied to a purchaser of goods or services as part of a temporary marketing promotion
  • donated free of charge for promotional purposes
  • sold for a particular good or service at a genuine discount
  • supplied as part of an employee rewards program
  • given as a bonus in connection with a purchase of a good or service for use in the same business (customer loyalty programs)
  • second-hand gift cards

What are the penalties for non-compliance?

If you breach the laws you could be fined $30,000 in the case of a body corporate or $6,000 for individuals.

You can find out more information here

Another CPA joins the SHB team!

Another CPA joins the SHB team!

SHB would like to congratulate Accountant Jarrod McDonald who has successfully completed his CPA qualifications.

Jarrod has been an integral part of the SHB team since March 2015 and we are thrilled to announce his latest achievement.

You can find more information on the CPA program here.

Common mistakes that lead to staff underpayments.

Common mistakes that lead to staff underpayments.

News is constantly breaking of employers in Australia who are underpaying their employees. With fines for these breaches ranging from $126,000 to $630,000 per infringement of the fair work act.

With Single Touch Payroll in effect, both the employee and the ATO will have up to date wage details and are more likely to pick up payroll errors you may be making.

Please read below for some examples from “In The Black” on common mistakes you could be making.

1. Incorrect calculations in overtime provisions

It’s crucial to properly apply rulings from appropriate awards, particularly in sections covering breaks. Many awards and agreements stipulate that an employee must take an eight or 10-hour break between shifts to avoid being paid overtime.

2. Underpayment on termination

The Fair Work Act requires that an employee aged over 45 who has worked at an organisation for at least two years receives an additional week of notice on termination. Payroll managers often miss this technicality.

A rule with relatively narrow application, it’s unlikely to result in millions of dollars in underpayment. However, a complaint can trigger an investigation by the Fair Work Commission.

3. Failing to pay overtime penalty rates to part-time employees

Some awards require overtime penalty rates to be paid to part-time employees when they work more than their contracted hours. Employers often incorrectly assume overtime is paid when a part-time employee works more than 38 hours a week.

Another potential source of confusion is what constitutes ordinary hours, which can differ between and even within awards. One classification might include Saturdays in ordinary hours, while another may not.

4. Superannuation underpayments

Superannuation errors can be costly for employers. Superannuation should be paid on ordinary-time earnings, including bonuses, commissions and leave loading. It is not paid on overtime, but is paid when an employee receives the equivalent of overtime rates – two different pay codes.

A payroll system that classifies earnings as overtime instead of the equivalent of overtime rates could lead to the underpayment of super.

The mistake must be disclosed to the Australian Taxation Office (ATO) and will incur administration fees and a fine, plus interest on the repayment.

5. Only paying the base rate on annual leave payments

Many employers pay annual leave at the base rate for 38 hours a week. However, annual leave payments should include any penalty rates the employee normally receives.

6. Excluding commissions and bonuses from long service leave

Long service leave is another area that commonly trips up employers. The first thing to know about long service leave is it is always calculated in weeks. If your payroll system is calculating it in days, your long service leave liability will be wrong.

Long service leave is valued according to average weekly earnings including bonuses and commissions in a set period, which varies between states and territories. Most employers get long service leave wrong. If you change from full-time to part-time because you’ve had a baby and you come back a few years later at full-time, average weekly earnings can be quite different, so it’s important to keep it in weeks, not days.

7. Lack of payroll reviews and outdated systems

Most underpayment errors stem from outdated payroll systems.Sometimes you see payroll systems that have been put in 10 years ago and never revisited, even though the laws change every year.

A common feature of high profile underpayment cases is the lack of a qualified or experienced payroll manager.

Organisations should perform spot compliance audits and hire or train a qualified payroll manager, or outsource payroll to a high-quality managed service provider.

Unsure if your payroll is compliant? Call our office or book an appointment online to review your current practices today!

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78 Henna Street, Warrnambool, VIC
Phone: (03) 55 618 618
Fax: (03) 55 618 600