Impact on sponsorship obligations of increased super
From 1 July 2021 the compulsory superannuation guarantee will increase from 9.5% to 10%. Approved Standard Business Sponsors must be careful in how they respond to this change.
Work sponsors are under a continuing obligation to pay the guaranteed earnings (or base salary) that was approved in the most recent nomination/position approval for the sponsored employee. When adjusting a sponsored employee’s salary or package for the change to the compulsory superannuation guarantee, it will be important that the guaranteed earnings (that is, salary ex super) does not fall below what was approved.
Work sponsors are also generally under a continuing obligation to ensure that the terms and conditions of employment given to sponsored employees are no less favourable than those that apply or would apply to an Australian doing equivalent work. You are unlikely to breach this obligation if you apply a uniform policy across your workforce.
If you are unsure whether your strategy for dealing with the rise to the compulsory superannuation guarantee meets your sponsor obligations, please contact us for advice.