IPA issues warning to employers doing the wrong thing
With the loophole enabling wage theft in relation to superannuation guarantee (SG) rules now closed, the Institute of Public Accountants has warned employers who were doing the wrong thing that they can no longer get away with it.
The Institute of Public Accountants (IPA) has issued a warning to employers that the loophole, which has seen wage theft in relation to SG rules in the past, is no longer.
“The IPA had originally advocated for the measure to be brought forward from its proposed start date of 1 July 2020, to the start of this financial year namely 1 July 2019,” said IPA chief executive officer, Andrew Conway.
“We were pleased that the Senate at least partly agreed with our position, and recommended the measure be brought forward to 1 January 2020."
The loophole came about where an employee salary sacrificed into his or her superannuation and the employer used that contribution to form part of the employer’s obligation to pay the 9.5 per cent SG, Mr Conway explained.
“Those employers who were doing the wrong thing by their employees can no longer get away with it. As of 1 January 2020, employers cannot use employee salary sacrificed contributions to fulfill employer SG commitments.
“We would encourage employees to consider salary sacrificing into their superannuation if they are financially able to do so, to build their retirement nest egg.”
Mr Conway also urged employees to check to ensure they are receiving the minimum SG contribution, from their employers.