Paid family and domestic violence leave - Australia

Introduction

The Australian Government has introduced paid family and domestic violence leave (FDVL) for all employees. This will take effect for employers with

• 15 or more employees on 1 February 2023 and
• less than 15 employees on 1 August 2023.

To learn more about the changes, please refer to the following pages published by Fair Work Ombudsman:

• Family & domestic violence leave
• New paid family and domestic violence leave

Below are the key call outs for customers using MYOB PayGlobal.

Key changes

The key changes impacting employers and employees in Australia as per the above Fair Work Ombudsman links are:

• Entitlement changes from 5 days unpaid to 10 days paid.

• New employees that commence on/after the effective legislation date get 10 days from 1st day of employment – they do not have wait for 12 months anymore.

• Existing employees on the effective legislation date, will have their existing balances reset to 10 days. When their next employment anniversary falls, the balances are required to be reset again to 10 days. 

  • This does mean some employees could legitimately access to more than 10 days paid within the first 12 months of the effective legislation date.

• Leave can be taken in any quantity either continuously or not, for example 1 hour here and there or 10 days in one block or any combo in between.

• FDVL supersedes other leave.

  • If employee is on Annual or Sick leave and they need to take FDVL, then the FDVL would replace the other leave.

  • There will be no difference to an employee getting sick whilst on annual leave. This means existing leave requests would need to be replaced/modified. “Other leave payments” may need to be reversed so that the other leave balances and liabilities get credited back what was replaced by FDVL.

• Casual employees can take FDVL outside their rostered hours of work. But the employer is only required to pay FDVL for the days/hours they were rostered. This does not stop the employer from paying generously although they are not required to.

Key issues

The following issues have been raised with Australian Taxation Office (ATO) and Fair Work by Digital Services Providers Australia New Zealand (DSPANZ):

• Clarification on how an employer can validate an employee received their full rate of pay.

  • For example, should it just be the planned work hours that get replaced in payroll or should all pay items be replaced with FDVL using a consolidated rate.

    Until we receive guidance from Fair Work/DSPANZ, employers should seek independent legal/financial advice on how FDVL should be represented within the payroll system.

• How the leave is to be reported in Single Touch Payroll (STP)

  • Safety concerns have been raised in respect to the employee’s MyGov account/annual income statements being accessed with additional value now showing up.

    Until we receive guidance from the ATO, employers should seek independent legal/financial advice on how FDVL should be reported within STP.

• What to display on Payslips for FDVL payment(s) and leave balances
  • Legislation says it must be included but the same safety concerns apply as for STP.
• How 'part-day' leave is to be calculated.
  • Especially if the employee is also entitled to incentive-based payments such as bonuses, loadings, monetary allowances, overtime or penalty rates and any other separately identifiable amounts.

How to implement this change into MYOB PayGlobal

For those customers who have implemented unpaid FDVL using the Leave Credits functionality, if you need to create a new Allowance record for paid FDVL, you will need to replace the instances where the old allowance is used. This may involve edits to ESS workflow, Leave Credit Table Leave Credits, Custom Reports, Award, and/or Payroll rules depending on your current configuration.

If nothing is recorded in your payroll system as yet, you will need to consider doing so, especially if the ATO requires the earnings to be reported via STP.