Obligations When Hiring a New Employee
So, you have hired a new employee. What happens now? There’s a fair bit of paperwork to be filled out to get them up and running. You need to add them to payroll, set them up in HR, introduce them to other staff, train them etc.
This article will help you understand your obligations to the ATO and the employee when hiring. We suggest you create a ‘New Employee Pack’ and have one of these packs handy when you hire a new employee. Contained within this pack should be:
Fair Work Information Statement
This is a summary of the NES (National Employment Standards). The NES are 10 minimum employment standards that every employee in Australia is entitled to.
The Fair Work Information Statement must be given to every new employee as soon as possible after they commence employment.
Superannuation Choice Form
You must give every new employee that is eligible to choose their own superannuation fund a Superannuation Choice Form. If you are not sure whether your employees are entitled to choose their own Superannuation Fund, contact Fair Work Australia.
They will advise you based on the modern award your employees are under. If your employees are eligible to choose, pre-fill this form with your default superannuation fund. You must then provide them with a copy. If your new employees do not return this form selecting a different, eligible superannuation fund, you must create a new superannuation account for them with your default superannuation fund on the form.
You have two months after receipt of the form to action the employee’s request.
Tax File Number Declaration
All new employees must be give a Tax File Number Declaration form and this must be submitted to the ATO within 14 days of commencement of employment. You must also advise the employee’s superannuation fund of the employee’s tax file number.
If the employee does not return the TFN declaration within 14 days, you must follow the instruction on the form regarding the withholding of PAYG tax and advise the ATO. Read the instructions carefully and advise your employees to do so.
You can lodge the completed TFN declaration on paper (retaining a copy for your records), or online via the ATO ECI. You can also submit TFN declarations through some software packages.
If you need TFN declarations, go to www.ato.gov.au and order online. The ATO will send out forms at no charge.
Employee Details Form
Although not a legal requirement, it is strongly suggested you have a custom made employee details form available to give all new employees. You will need some employee details to enter into the HR system, Payroll system, etc. It is much easier if you have all this information in the one place.
Download a standard Employee Details Form. You may want to customise this a little. Consider such things as: previous medical history, ambulance membership, preferred medical specialist, etc. Remember to be sensitive to current privacy and equal opportunity legislation when collecting personal information.
Some other documents you may wish to include in the New Employee Pack are: Job description, Company policy and documents instructions, emergency procedures, employee contract and/or modern award information.
When you hand the employee a New Employee Pack, be very clear about when you require the completed forms to be handed in and to whom they are to be submitted. Some employees ask a new employee to sign a document stating they have received all the information contained in the pack, specifying the names of the documents.