Global Employer Services update

Key developments shaping employer compliance 

• Recent cases highlight the importance of compliance with wage and entitlement obligations. 
  For instance, a corporate catering company director was held personally liable for $2.8 million in unpaid tax obligations after failing to meet superannuation guarantee charge and GST liabilities 1. This case demonstrates the ATO's enforcement of Director Penalty Notices (DPNs) and underscores the significant personal financial liability directors face for non-compliance.
• The Fair Work Commission has reported a 57% rise in dismissal and general protections claims between July and September 2025, with almost 40% of settlements exceeding $10,000 2. 
  This increase is driven by greater use of AI tools and paid agents assisting workers, highlighting the elevated compliance risks associated with contractor arrangements, particularly within the gig economy and other non-traditional workforce models.
• The ATO has confirmed that payday superannuation will commence on 1 July 2026, requiring employers to pay employees' superannuation guarantee contributions at the same time as salary and wages 3. 
  This reform is intended to address unpaid superannuation entitlements, estimated at more than $5 billion each year 4. Major funds such as Australian Super, Australian Retirement Trust (ART), and Rest have welcomed the reform, highlighting benefits such as earlier payments and stronger compounding growth 5.
   

Global Employer Services update - Transcript

Welcome to RSM’s latest Global Employer Services update. 

 Payday Super 

The ATO has confirmed that payday superannuation will commence on 1 July 2026, requiring employers to pay employees' superannuation guarantee contributions at the same time as salary and wages. The legislation received assent on 6 November 2025 through the Treasury Laws Amendment (Payday Superannuation) Act 2025 and the Superannuation Guarantee Charge Amendment Act 2025. Deputy Commissioner Emma Rosenzweig described the reform as a once in a generation change and urged employers to begin planning now, noting that many employers already pay super on payday and do not need to wait until the law takes effect.

The reform is intended to address unpaid superannuation entitlements, estimated at more than $5 billion each year. Industry bodies, including the Association of Superannuation Funds of Australia (ASFA), have described the change as significant, noting that it will improve fairness and retirement balances. ASFA has launched its In Practice program to prepare the industry, focusing on regulatory settings, SuperStream v3, technology upgrades, and employer communications. 

Major funds such as Australian Super, Australian Retirement Trust (ART), and Rest have welcomed the reform, highlighting benefits such as earlier payments and stronger compounding growth.

 No free lunch: Corporate catering director lands $2.8m tax bill 

Staying on the topic of superannuation, a corporate catering company director has been held personally liable for $2.8 million in unpaid tax obligations after failing to meet superannuation guarantee charge and GST liabilities. The ATO issued Director Penalty Notices, which allow directors to be held personally responsible when companies do not meet their tax obligations. The case demonstrates the ATO's enforcement of DPNs and highlights that directors cannot avoid responsibility for company tax debts, including superannuation and GST, even if the company itself is insolvent. The ruling reinforces the importance of directors ensuring compliance with tax requirements, as failure to do so can result in significant personal financial liability.

Roster considerations for public holidays - OS MCAP fined $100k 

A recent Federal Court case against OS MCAP, a labour hire company for BHP, highlighted that employers cannot simply roster employees to work on public holidays without first asking them. This case found OS MCAP to have breached the Fair Work Act 2009 by requiring 85 miners to work on Christmas and Boxing Day in 2019, depriving them of the opportunity to provide reasonable grounds for why they could not work. Section 114 of the Act entitles employees to be absent on public holidays, and while employers may request that they work, the request must allow for a genuine choice.

The ruling is significant for rostering and broader wage compliance processes. It confirmed the following steps must be followed:

1. Employers must request that an employee works on a public holiday, including days such as Christmas.

2. Employees must be given the opportunity to raise reasonable grounds for why they are unable to work.

3. Employers may still require an employee to work if they consider the grounds put forward to be unreasonable, though this may be difficult to argue in relation to days like Christmas.

The court ordered OS MCAP to pay compensation ranging from $800 to $1,700 per worker, totalling about $84,000, and imposed an additional $15,000 penalty payable to the union. The ruling serves as a warning to employers that holiday shifts must be requested rather than imposed, and failing to respect workers' rights can result in significant financial and legal consequences. This decision reinforces that public holidays are a default entitlement and strengthens protections for employees against unreasonable rostering practices.

Warehouse workers the next union target after mines for Labor laws 

Warehouse workers have become the next major focus for unions following the mining sector under the Albanese government's "same job, same pay" laws. These laws are designed to prevent employers from using labour hire arrangements to undercut wages set in enterprise agreements. Mining was the first industry targeted, with unions securing significant pay rises for labour hire workers across large workforces. The United Workers Union has now identified warehousing as the next target, with hundreds of workers already benefiting from pay increases under the new laws. Unlike mining, warehousing involves more employers with smaller workforces, making implementation more fragmented. The Shop, Distributive and Allied Employees' Association and United Workers Union are applying the legislation to ensure labour hire workers in warehouses receive equal pay and conditions. Early cases show warehouse workers have secured pay rises similar to those achieved in mining, demonstrating the broader reach of the legislation.

ATO phone contractor lodges ‘same job, same pay’ application 

An ATO phone contractor has lodged an application under the new Same Job, Same Pay provisions introduced by the Fair Work Legislation Amendment (Closing Loopholes) Act 2023. The application was made to the Fair Work Commission and seeks to ensure that labour hire workers performing the same duties as directly employed staff receive equivalent pay. The legislation allows the Commission to issue orders requiring labour hire employees to be paid the same as host employees covered by enterprise agreements. Service contractors are excluded from the provisions, but regulated labour hire arrangements are included. This case is one of the first applications under the new laws, following earlier rulings in the mining sector where labour hire workers were awarded pay increases. The outcome of the application could set a precedent for similar claims across government agencies and private employers using labour hire.

Settlements hit $10k as workplace case surge threatens system

The Fair Work Commission has reported a 57% rise in dismissal and general protections claims between July and September 2025, with almost 40% of settlements exceeding $10,000. A large proportion of the increase is due to general protections claims, which do not require a minimum employment period and have no cap on compensation. 

The increase is driven by greater use of AI tools and paid agents assisting workers. Reforms have been announced to tighten processes, including stronger application requirements and enhanced screening to manage the growing caseload.

Uber Eats, DoorDash pay rates are about to go up by 25pc

Uber Eats and DoorDash delivery riders in Australia will receive a pay increase of about 25% from March 2026. The Fair Work Commission has introduced new minimum standards for food delivery workers, marking the first time gig economy platforms are subject to such regulation. The decision follows government reforms aimed at improving pay and conditions for gig workers. The increase will apply to riders working for food delivery platforms, with other sectors such as rideshare expected to be considered later. The Albanese government has supported these changes to address concerns about insecure work and low pay in the gig economy. Industry representatives have warned that higher costs may be passed on to consumers and restaurants, while unions and worker advocates have welcomed the reforms as necessary to ensure fair treatment of delivery workers.

Tax Office, FWO, Home Affairs wrap up compliance blitz

Operation Topaz was a joint compliance initiative conducted in Gatton, Queensland, by the ATO, the Fair Work Ombudsman, and the Department of Home Affairs. The operation targeted agriculture and labour hire businesses and involved audits of more than 50 taxpayers across seven locations. Authorities identified over $25 million in unpaid taxes, superannuation, and other liabilities. Several employers were found to have breached workplace laws, including failing to pay minimum casual wages and overtime rates. Businesses that were non-compliant now face penalties and interest charges. The majority of businesses audited were compliant, but a minority were identified as deliberately avoiding obligations. The agencies confirmed that further investigations will continue into businesses suspected of operating in the shadow economy, with a focus on breaches of tax, employment, and immigration laws.

Industrial Magistrate Coleman emphasised that the owners had shown a "blatant disregard" for the compliance regime and their obligations as employers.

Private Sector Labour Relations Director Cara Breuder said the $31,000 penalty reflects the seriousness of the misconduct and takes into consideration the circumstances of the young, vulnerable employee.

ATO disagrees with AAT ruling to claim deductions for occupancy costs

The Hall case, decided by the Administrative Appeals Tribunal (AAT), involved ABC radio presenter Ned Hall who claimed occupancy costs for using a second bedroom in his apartment as a home office during the COVID-19 pandemic. The AAT ruled that Hall was entitled to claim occupancy and car expenses, finding they were directly linked to the earning of assessable income. This decision challenges the ATO's long-standing position that home office occupancy expenses, such as rent and mortgage interest, are generally not deductible unless the space is considered a "place of business." The ATO has lodged an appeal to the Federal Court against the decision. If upheld, the ruling could allow employees to claim significant deductions for occupancy costs, which may have substantial budgetary implications. The case is considered important in the context of modern work arrangements, where many employees perform substantial duties from home, and highlights the need for taxpayers to carefully consider eligibility for home office deductions while awaiting the outcome of the appeal.

ATO plots holiday home tax deduction crackdown - TR 2025/D1

Finally on some personal tax considerations, the ATO has released draft ruling TR 2025/D1, which targets tax deductions for holiday homes and short-term rental properties. The ruling applies to individuals who own rental properties but are not operating a business. It requires that all amounts received for property use be declared as assessable income, including payments from short-term guests, long-term tenants, and friends or family paying discounted rent. Deductions for expenses such as interest, rates, insurance, and maintenance will be reduced or denied if the property is mainly used personally or rented out in non-commercial ways. The ruling clarifies that simply advertising a property for rent is not sufficient to claim deductions, and genuine commercial intent must be demonstrated. Owners who use their holiday homes during peak rental periods or rent them below market rates will face stricter limits on deductions. Under section 26-50 of the Income Tax Assessment Act 1997, certain holiday homes will be classified as leisure facilities, meaning deductions are not allowed unless the property is primarily used to produce assessable income.

The ATO is particularly monitoring owners who use holiday homes during peak rental periods or rent them below market value, as these situations suggest personal use.

The ATO has also issued two new Practical Compliance Guidelines PCG 2025/D6 and PCG 2025/D7 to outline how rental income reporting, private use, and deductibility will be assessed. This draft ruling replaces older guidance (IT 2167) and reflects the ATO's concern that many taxpayers have been claiming deductions for properties primarily used for personal enjoyment.

Roster considerations for public holidays - OS MCAP fined $100k 

A recent Federal Court case against OS MCAP, a labour hire company for BHP, highlighted that employers cannot simply roster employees to work on public holidays without first asking them. This case found OS MCAP to have breached the Fair Work Act 2009 by requiring 85 miners to work on Christmas and Boxing Day in 2019, depriving them of the opportunity to provide reasonable grounds for why they could not work. Section 114 of the Act entitles employees to be absent on public holidays, and while employers may request that they work, the request must allow for a genuine choice.

The ruling is significant for rostering and broader wage compliance processes. It confirmed the following steps must be followed:

1. Employers must request that an employee works on a public holiday, including days such as Christmas.

2. Employees must be given the opportunity to raise reasonable grounds for why they are unable to work.

3. Employers may still require an employee to work if they consider the grounds put forward to be unreasonable, though this may be difficult to argue in relation to days like Christmas.

The court ordered OS MCAP to pay compensation ranging from $800 to $1,700 per worker, totalling about $84,000, and imposed an additional $15,000 penalty payable to the union. The ruling serves as a warning to employers that holiday shifts must be requested rather than imposed, and failing to respect workers' rights can result in significant financial and legal consequences. This decision reinforces that public holidays are a default entitlement and strengthens protections for employees against unreasonable rostering practices.

Warehouse workers the next union target after mines for Labor laws 

Warehouse workers have become the next major focus for unions following the mining sector under the Albanese government's "same job, same pay" laws. These laws are designed to prevent employers from using labour hire arrangements to undercut wages set in enterprise agreements. 

Mining was the first industry targeted, with unions securing significant pay rises for labour hire workers across large workforces. 

The United Workers Union has now identified warehousing as the next target, with hundreds of workers already benefiting from pay increases under the new laws. Unlike mining, warehousing involves more employers with smaller workforces, making implementation more fragmented. The Shop, Distributive and Allied Employees' Association and United Workers Union are applying the legislation to ensure labour hire workers in warehouses receive equal pay and conditions. 

Early cases show warehouse workers have secured pay rises similar to those achieved in mining, demonstrating the broader reach of the legislation.

Settlements hit $10k as workplace case surge threatens system

The Fair Work Commission has reported a 57% rise in dismissal and general protections claims between July and September 2025, with almost 40% of settlements exceeding $10,000. A large proportion of the increase is due to general protections claims, which do not require a minimum employment period and have no cap on compensation. 

The increase is driven by greater use of AI tools and paid agents assisting workers. Reforms have been announced to tighten processes, including stronger application requirements and enhanced screening to manage the growing caseload.

Uber Eats, DoorDash pay rates are about to go up by 25pc

Uber Eats and DoorDash delivery riders in Australia will receive a pay increase of about 25% from March 2026. The Fair Work Commission has introduced new minimum standards for food delivery workers, marking the first time gig economy platforms are subject to such regulation. The decision follows government reforms aimed at improving pay and conditions for gig workers. 

The increase will apply to riders working for food delivery platforms, with other sectors such as rideshare expected to be considered later. The Albanese government has supported these changes to address concerns about insecure work and low pay in the gig economy. Industry representatives have warned that higher costs may be passed on to consumers and restaurants, while unions and worker advocates have welcomed the reforms as necessary to ensure fair treatment of delivery workers.

Tax Office, FWO, Home Affairs wrap up compliance blitz

Operation Topaz was a joint compliance initiative conducted in Gatton, Queensland, by the ATO, the Fair Work Ombudsman, and the Department of Home Affairs. The operation targeted agriculture and labour hire businesses and involved audits of more than 50 taxpayers across seven locations. Authorities identified over $25 million in unpaid taxes, superannuation, and other liabilities. Several employers were found to have breached workplace laws, including failing to pay minimum casual wages and overtime rates. Businesses that were non-compliant now face penalties and interest charges. The majority of businesses audited were compliant, but a minority were identified as deliberately avoiding obligations. The agencies confirmed that further investigations will continue into businesses suspected of operating in the shadow economy, with a focus on breaches of tax, employment, and immigration laws.

Industrial Magistrate Coleman emphasised that the owners had shown a "blatant disregard" for the compliance regime and their obligations as employers.

Private Sector Labour Relations Director Cara Breuder said the $31,000 penalty reflects the seriousness of the misconduct and takes into consideration the circumstances of the young, vulnerable employee.

ATO disagrees with AAT ruling to claim deductions for occupancy costs

The Hall case, decided by the Administrative Appeals Tribunal (AAT), involved ABC radio presenter Ned Hall who claimed occupancy costs for using a second bedroom in his apartment as a home office during the COVID-19 pandemic. The AAT ruled that Hall was entitled to claim occupancy and car expenses, finding they were directly linked to the earning of assessable income. This decision challenges the ATO's long-standing position that home office occupancy expenses, such as rent and mortgage interest, are generally not deductible unless the space is considered a "place of business." The ATO has lodged an appeal to the Federal Court against the decision. If upheld, the ruling could allow employees to claim significant deductions for occupancy costs, which may have substantial budgetary implications. The case is considered important in the context of modern work arrangements, where many employees perform substantial duties from home, and highlights the need for taxpayers to carefully consider eligibility for home office deductions while awaiting the outcome of the appeal.

ATO plots holiday home tax deduction crackdown - TR 2025/D1

Finally on some personal tax considerations, the ATO has released draft ruling TR 2025/D1, which targets tax deductions for holiday homes and short-term rental properties. 

The ruling applies to individuals who own rental properties but are not operating a business. 

 

It requires that all amounts received for property use be declared as assessable income, including payments from short-term guests, long-term tenants, and friends or family paying discounted rent. Deductions for expenses such as interest, rates, insurance, and maintenance will be reduced or denied if the property is mainly used personally or rented out in non-commercial ways. The ruling clarifies that simply advertising a property for rent is not sufficient to claim deductions, and genuine commercial intent must be demonstrated. 

Owners who use their holiday homes during peak rental periods or rent them below market rates will face stricter limits on deductions. Under section 26-50 of the Income Tax Assessment Act 1997, certain holiday homes will be classified as leisure facilities, meaning deductions are not allowed unless the property is primarily used to produce assessable income.

The ATO is particularly monitoring owners who use holiday homes during peak rental periods or rent them below market value, as these situations suggest personal use.

The ATO has also issued two new Practical Compliance Guidelines PCG 2025/D6 and PCG 2025/D7 to outline how rental income reporting, private use, and deductibility will be assessed. This draft ruling replaces older guidance (IT 2167) and reflects the ATO's concern that many taxpayers have been claiming deductions for properties primarily used for personal enjoyment.