Pay, leave & ending employment for legacy employers

Published 25 September 2020

This page has information for legacy employers and their employees.

Legacy employers no longer receive JobKeeper payments but may be able to use some JobKeeper provisions.

Qualifying employers are employers that qualify for the JobKeeper scheme and receive payments for their eligible employees. Learn more at JobKeeper scheme – overview.

Find information about pay, leave and ending employment for legacy employers and their eligible employees.

Pay

The information in this section is for legacy employers and their eligible employees.

Qualifying employers and their employees can check what applies for pay at Pay and the JobKeeper scheme.

Legacy employers are employers that:

  • previously participated in the JobKeeper scheme, but no longer qualify, or choose not to participate, from 28 September 2020
  • demonstrate at least a 10% decline in turnover for a relevant quarter and get either a:
    • 10% decline in turnover certificate from an eligible financial service provider, or
    • if they’re a small business, getting a statutory declaration.

For more information about legacy employers, visit Legacy employers.

Legacy employers have to follow the usual rules for paying employees. This means the minimum terms and conditions set under any award, enterprise agreement, employment contract and workplace policy that apply. This includes payment of their minimum pay rates as well as any penalties, such as overtime or public holiday pay.

Use our Pay and Conditions Tool to calculate penalty and overtime rates under an award.

However, a JobKeeper enabling direction or agreement applies instead if the direction or agreement is different to the employee's usual terms and conditions.

If a legacy employer issues a direction or makes an agreement under the JobKeeper provisions, it doesn’t reduce the employees minimum pay rates. An employee working reduced or different hours under these arrangements still has to be paid any applicable penalty or overtime rates for any hours that attract those extra rates.

Any terms and conditions not related to the direction or agreement continue (such as sick and carer’s leave).

Public holidays

If a legacy employer gives an employee a JobKeeper enabling stand down direction, it doesn’t change the employee’s entitlement to public holiday pay. This is because the direction doesn’t apply when the employee is entitled to be absent from work, including on a public holiday. Find out more about these kinds of directions at JobKeeper enabling directions and agreements for legacy employers.

Pay slips and paying wages

Pay slip and record-keeping obligations continue to apply for all legacy employers. Find more information on employer obligations at Pay slips and record-keeping.

Employers also need to pay their employees’ wages in accordance with their usual requirements, including frequency of pay. See Paying wages.

Annual Wage Review 2020

The Fair Work Commission announced a 1.75% increase to all award minimum wages in 2020. The new national minimum wage is $753.80 per week or $19.84 per hour and starts from the first full pay period on or after 1 July 2020.

A full list of the awards in each group is available at The Commission has announced a 1.75% increase to minimum wages. Most employees are covered by an award. If you're not sure which award applies, use Find my award.

Employers covered by an award must pay employees the applicable minimum and penalty rates as set out in the award.

Use our Pay and Conditions Tool to find out which pay rates apply now.

More information:

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Leave

The information in this section is for legacy employers and their eligible employees.

Qualifying employers and their employees can check what applies for leave at Leave and the JobKeeper scheme.

All the usual rules for taking and accruing leave apply to employees of a legacy employer. This includes the rules found in any applicable award or agreement.

Accruing leave

Employees of a legacy employer continue to accrue their usual leave entitlements. This includes employees that have been given a JobKeeper enabling stand down direction to work less hours. They continue to accrue leave entitlements as if they had worked their normal hours.

Taking leave

If an employee of a legacy employer has been given a JobKeeper enabling stand down direction to work less hours, they can agree with their employer to take paid leave to top up the amount they’re being paid. If that happens, for the time they’re on paid leave, they’re not on a JobKeeper enabling stand down.

Agreements to take annual leave

Under the original JobKeeper provisions, employers could make agreements with eligible employees to take annual leave. This included taking annual leave at half pay. This stopped applying from 28 September 2020.

From 28 September 2020, all employers and employees under JobKeeper need to follow the usual rules for taking and requesting annual leave. This includes the rules set by an award or agreement. Understand the usual rules for taking annual leave on our Annual leave page.

Sick or carer’s leave

On 18 May 2020 the Federal Court of Australia handed down a decision finding that an employee who has been stood down under the Fair Work Act can’t take paid sick and carer’s leave or compassionate leave.

This page has been updated to reflect this decision.

An appeal of this decision will be heard by the Full Federal Court of Australia. In the meantime, the decision and the information on this page reflects the current state of the law and applies to affected employers and employees.

Employees of a legacy employer continue to accrue their usual sick or carer’s leave entitlements.

The JobKeeper provisions don’t affect an employee’s entitlement to take paid sick or carer’s leave, unless they’ve been given a JobKeeper enabling stand down direction.

An employee of a legacy employer who’s been directed to work less hours under the JobKeeper provisions can’t use paid sick and carer’s leave or compassionate leave for the days or hours that they’ve been directed not to work. To find out more, go to Sick and carer’s leave.

Long service leave

The JobKeeper provisions don’t impact or change an employee’s long service leave entitlements. To find out more, go to our Long service leave page.

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Ending employment

The information in this section is for legacy employers and their eligible employees.

Qualifying employers and their employees can check what applies for ending employment at Ending employment and the JobKeeper scheme.

All the usual rules apply for legacy employers and their employees for ending employment.

Dismissal

If a legacy employer is ending an employee’s employment, the employee may be entitled to:

  • notice
  • payment of accrued entitlements including pay, annual and long service leave
  • redundancy pay
  • other entitlements.

When dismissing an employee, a legacy employer should check the applicable award, enterprise agreement, employment contract and workplace policies that apply. They should also check the National Employment Standards (NES). These set out the rules and obligations when dismissing an employee. They apply when a legacy employer is dismissing an employee.

The Fair Work Act also includes protections against being dismissed because of:

  • discrimination
  • a reason that is harsh, unjust or unreasonable
  • in a way that is harsh, unjust or unreasonable
  • another protected right.

These protections at work continue to apply to employees impacted by coronavirus and for those of legacy employers.

If an employee is given notice of termination while a JobKeeper enabling stand down direction to work reduced hours is in place, and their legacy employer wants them to stay employed during their notice period, they continue to work the reduced hours for the notice period.

For the time they are still employed and the JobKeeper enabling stand down direction still applies, the employee needs to be paid their usual pay for any work they perform during that fortnight (including any leave payments or public holiday pay they are entitled to).

Employees can be paid out notice instead of being asked to work during a notice period. This is called payment in lieu of notice.

If this happens, the employee’s final pay is calculated on their full pay rate and usual hours and days of work, as if the JobKeeper enabling stand down direction hadn’t been given. For example, an employee who is entitled to 3 weeks’ notice will get 3 weeks’ pay at their full rate of pay for their usual hours.

More information:

Redundancy

Redundancy happens when:

  • an employer doesn’t need the employee’s job to be done by anyone, or
  • the business becomes insolvent or bankrupt.

The JobKeeper scheme hasn’t changed the rules for calculating an employee’s redundancy entitlements. When an employee’s role is made redundant, they may:

  • get notice (or payment in lieu of notice)
  • be entitled to redundancy pay (also known as severance pay)
  • need to be consulted about the redundancy before it happens.

Redundancy pay is paid based on an employee’s original and usual rostered hours, not the hours under any JobKeeper direction. For example, an employee working fewer or no hours under a JobKeeper enabling stand down direction is entitled to redundancy pay based on their ordinary and rostered hours before the stand down direction was given.

When making a position redundant, a legacy employer should check the applicable award, enterprise agreement, employment contract and workplace policies that apply. They should also check the NES. These set out the rules and obligations when dismissing an employee, including redundancy.

If a business is considering redundancy of 15 or more staff, employers need to give written notification to Services Australia of the proposed dismissals. More information, and a notification template, can be found on the Services Australia website external-icon.png.

More information

Resignation

An employee of a legacy employer can resign at any time, provided they follow the usual rules. They can resign when a JobKeeper enabling direction or agreement is in place including to work fewer hours, change duties, or change work location.

When an employee resigns, they need to give their employer any required notice. Employees should check the rules about giving notice in any award, enterprise agreement, employment contract or workplace policy.

An employee’s notice period can run at the same time as a JobKeeper enabling stand down direction and any rostered work. Employment ends at the end of the notice period. It can also end earlier if the employer and employee both agree. Learn more about resignation under a JobKeeper enabling stand down direction in Ending employment during a stand down in our Library.

More information:

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More information

Pay

Information, tools and resources:

Leave

Information, tools and resources:

Ending employment

  • Go to our Library for detailed information about:

Qualifying employers

Find out what applies for these employers and their employees under JobKeeper:

Award & agreements

Enforcement and dealing with disputes

We help employers and employees understand and follow Australian workplace laws. We do this by:

  • providing information and education
  • providing tools, templates and guides
  • helping you resolve workplace issues.

Our Resolving workplace issues during coronavirus page has information and resources to help you resolve workplace disputes. It also has information about our enforcement role under the JobKeeper scheme and who can help with:

  • questions about eligibility for the JobKeeper scheme
  • disputes about directions or requests under the JobKeeper scheme
  • disputes related to requirements for legacy employers, including certificates.

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