Businesses have a strong incentive to get their houses in order regarding the payment of superannuation to their employees as new laws came into operation on 1 July 2018 that bring the prospect of jail time for repeat offenders.
Currently, employers that fail to pay their employees’ superannuation on time are required to pay penalties in addition to their existing obligations – this is known as the superannuation guarantee charge.
The new laws are directed towards employers with a track record of intentionally and repeatedly failing to meet their superannuation liabilities. The Commissioner of Taxation will be empowered to issue repeat offender employers with a final notice to pay the superannuation guarantee charge.
Employers that ignore these directions will be liable for criminal penalties, including, most significantly, 12 months’ imprisonment.
The Commissioner can also issue directions to employers who do not understand their superannuation obligations to attend an approved course to address knowledge gaps and improve future compliance.
As a further incentive, on 24 May 2018 the government announced that it will offer, effective immediately, a 12 month amnesty. The amnesty is a one-off opportunity for employers to self-correct past super-guarantee non-compliance without penalty. Of course, terms and conditions apply to any employers seeking to take advantage of the amnesty.