JobKeeper rules are a staffing nightmare for small business

The present JobKeeper rules are causing causing staffing issues for small businesses, according to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell.

The reduction of the JobKeeper rate that took effect on 4 January has meant that some eligible businesses have been unable to afford the top-up wages, forcing them to reduce the hours of their staff, the Ombudsman says. This, in turn, has led to some staff members tendering their resignations to look for opportunities in other companies.

“While some small businesses are doing well, there are a significant proportion of small businesses that are still doing it tough,” Carnell said.

“While the JobKeeper program was originally designed to allow businesses to keep their existing staff, the economic recovery is presenting new challenges for some small businesses.

“Under JobKeeper rules, eligible businesses cannot replace their staff with a new staff member and still attract the government payment,” Carnell added. “Unfortunately this rule has the unintended consequence of increasing the divide between the haves and have nots in the small-business sector.”

The Ombudsman said that it is imperative that the government changes JobKeeper so that small businesses that have been hit hardest by the Covid crisis can replace their staff to help them get their businesses back up-and-running.

“Our national economic recovery will be driven by jobs growth and that’s why it’s critical to support small business employers during this difficult time to allow them to survive, grow and hire in the future,” Carnell concluded.

This article was first published on Inside Small Business, a sibling website to Inside Franchise Business Executive.