Under section 524 of the Fair Work Act, an employer can stand down an Employee without pay where they can’t usefully be employed because of a stoppage of work for any cause for which the Employer can’t reasonably be held responsible.

Stood-down Employees are still considered employed by the business and generally do not reduce the Employee’s headcount for the Employer. However, this also ensures that these Employees maintain basic Employment Rights as part of the Fair Work National Employment Standards including:

• accruing Annual and Personal Leave during their stand-down period;
• being paid for any Public Holidays falling during such period;
• the stand-down period is considered part of the continuous employment when calculating Notice Periods and access to Long Service Leave.

Standing down Employees may affect the Employers eligibility to access other COVID-19 Support Schemes, such as the JobMaker scheme. If an Employer plans to stand down their Employees, the Stand-Down notification must be issued in writing. Fair Work has provided a template letter and checklist for Employers to use. More information on Employment Stand-Down is available on the Fair Work website.

Create the stand-down pay item

1. From the Organisation Menu, go to Settings > Payroll Settings
2. Select the [Pay Items] >[Earnings] Tab
3. Click on [Add] > Ordinary Time Earnings
   
   

   è  The OTE Pay Item screen opens
   
   
   
   

4. Select/Enter the following details:
   • Earnings Name         > Type: Pandemic Stand Down
   • Display Name           > Type: Pandemic Stand Down
   • Rate Type                > Select: Multiple of employee's ordinary earnings rate
   • Multiple (ex. 1.5)      > Type 0
   • Amount                   > Type the ATO statutory amount for the year
   • Expense Account      > Select: Wages & Salaries
   • Exempt from PAYG   > Do Not select this option
   • Exempt from Super   > Do Not select this option
   • Reportable as W1     > Select this option
   • Accrue leave            > Select this option
5. Click on [Add]

Add the Pandemic Stand Down Pay Item to the Employee's Pay Template

1. Go to Payroll > Employees
2. Open the Employee details and click on the [Pay Template] Tab
3. Click on [+Earnings Line]
4. Select/Enter the following details:
   • Earnings Rate > Select: Pandemic Stand Down
   • Calculation Type > Select: Use Earnings Rate 
5. Click on [OK]
   
   è The Add Earnings Line screen opens
   
   
   
   è The Earnings Line is added to the Employee's Pay Template
   
   
6. Change the number of hours for their main Earning line (i.e. Ordinary Hours) to 0
7. Click on [Save]