House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon J. B. Hockey MP)

Chapter 1 - Payslip reporting

Outline of chapter

1.1 Schedule 1 to this Bill amends the Superannuation Industry (Supervision) Act 1993 (SISA) to repeal the payslip reporting provisions.

Context of amendments

1.2 The payslip reporting provisions in the SISA require employers to include in employee payslips information prescribed by the regulations.

1.3 It was intended that regulations be made so that employers had to report on payslips the amount of superannuation contributions and the date on which the employer expects to pay them. This has not occurred.

1.4 There are existing requirements in the Fair Work Act 2009 and the Fair Work Regulations 2009 for employers to include in payslips the amount of superannuation contributions they are liable to make.

Summary of new law

1.5 The amendment repeals the payslip reporting provisions in the SISA.

Comparison of key features of new law and current law

Detailed explanation of new law

1.6 The payslip reporting requirement in the SISA was intended to provide protection for employees whose employers do not pay their superannuation.

1.7 Under the Fair Work Act 2009 and the Fair Work Regulations 2009, employers were (and still are) required to report on payslips either superannuation entitlements that accrued during the pay period, or actual contributions made. Since 2012, directors can be held personally liable for the superannuation guarantee liabilities of a company. Accordingly, the Australian Taxation Office (ATO) is able to pursue directors for unpaid and unreported superannuation guarantee liabilities of the company.

1.8 The payslip reporting requirement in the SISA requires employers to include in the payslip information prescribed by the Superannuation Industry (Supervision) Regulations 1994. The explanatory memorandum to the originating Bill said that Regulations would require employers to report the amount of superannuation contributions, as well as the date on which the employer expects to pay them. However, these regulations were never made as payslip reporting has proved to be more complex and expensive to implement than originally expected.

1.9 If employers were required to report actual contributions, they would need to invest in major upgrades in their software and the benefit would likely be marginal as most employers pay their superannuation, non-compliant employers may not provide accurate information and employees may not take regular notice of what is reported on their payslips. In addition, 70 per cent of affected employees do not make a complaint to the ATO until after they have left the employer, possibly because they don't want to jeopardise their jobs (and payslip reporting is unlikely to change that).

1.10 This Bill repeals the payslip reporting requirement in the SISA to remove duplication. [Schedule 1, items 1 to 6]

1.11 This will reduce unnecessary duplication in the law.

Consequential amendments

1.12 None.

Application and transitional provisions

1.13 These amendments commence on Royal Assent.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Payslip reporting

1.14 This Schedule is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview

1.15 Schedule 1 to this Bill amends the Superannuation Industry (Supervision) Act 1993 to repeal the payslip reporting provisions.

Human rights implications

1.16 This Schedule does not engage any of the applicable rights or freedoms.

Conclusion

1.17 This Schedule is compatible with human rights as it does not raise any human rights issues.