New Laws That Will Affect Small Businesses in 2020
As a business owner, it's important to keep up-to-date with the relevant laws. Find out what's set to change in 2020 so you can prepare your business.
With the new year about to start, it’s important make sure you are prepared and legally compliant. Since July 1 2019, there have been a number of changes to laws relevant to small businesses. If you were not aware before or haven’t already made the necessary changes, it’s wise to make them before the year ends. In this article, we’ll summarise the most important changes which will affect small businesses next year.
1. Minimum wage increase
The minimum wage has now increased to $19.49 per hour. It’s important that any employees you hire are paid the correct amount for the time they work. This is also includes any applicable overtime payments. If this expense seems to great, you may have to make some positions at your business redundant.
If you haven’t done so already, it’s not too late to make the necessary adjustments to your payroll. Some of your employees may not be aware of this either, so send out emails or letters to advise them of the upcoming change. You should also advise them when the change will take place.
2. Sunday penalty rates
For those of you who are employers in the fast food, retail, pharmacy or hospitality sectors, Sunday penalty rates have decreased again. Sunday penalty rates for employees have dropped to 180% of the base rate. Last year it dropped 5% to 195%.
This change might sound like will save your business money, however if you make the proper calculations there isn’t much difference. The increase in minimum wage and decrease in penalty rates will closely even out.
3. Unfair dismissal threshold
We’ve previously looked into this area in more depth in another legal guide. Essentially, the high income threshold has increased to $148,700 per annum, meaning anyone who earns less than this amount can apply for unfair dismissal. Of course there are other criterion employees must satisfy to successfully claim unfair dismissal, but none of those have changed.
This change will most likely see an increase in applications for unfair dismissal by more employees. To review your documents and better protect your business from this change, talk to an employment lawyer.
This is mostly related to any pensioner employees you may have. Any employees who also receive an age pension are now entitled to $300 a fortnight instead of $250 for their work bonus. Other changes are more specific to superannuation companies and member contributions.
As of 1 July 2019, new laws have been introduced that will change the way clauses can be enforced in a contract when one party becomes insolvent. Basically, if the party to your contract becomes insolvent, you will not be able to terminate the contract straight away. This change only applies to contracts, agreements and arrangements made after the above mentioned date.
The main purpose of this change is to allow time for struggling business to recover, especially when they are restructuring or trying to fix the problems. This can be both good and bad news for you, depending which side of the contract you are on.
It is highly recommended that you have a contract lawyer review and update any clauses in your new contracts to allow for this change. Pay special attention to the termination clauses and insolvency areas.
From all of these changes, it is clear that there isn’t that much difference from the previous year. This allows businesses to adapt slowly and adjust their policies to keep up without damaging their business entirely.
If you need further assistance with adapting to these changes or understanding them, you can always speak to a business lawyer.
Taeisha is a Legal intern at Lawpath. She is a Law student at Macquarie University, previously completing her Commerce degree. She has an interest in Commercial Law.