The Centre’s update pointed to the Government’s ‘right to disconnect’ law, introduced last year, as a potential cause for the drop in overtime. The measure gave employees the legal right to refuse work-related contact outside of regular working hours. The goal was to encourage workers to “leave work at work”, protect them from overzealous higher-ups, and, ultimately, to lessen the amount of unpaid overtime.

The right to disconnect will apply to small businesses from August this year. While the drop in unpaid overtime might make some optimistic about the law’s rollout, its impact on small-business working hours remains uncertain.

Employees still work five extra weeks a year in unpaid overtime

It’s a positive sign that overtime hours have decreased. However, employees continue to put in a significant amount of extra unpaid hours.

According to the Centre for Future Work’s research, employees are still working an average of 3.6 hours of unpaid work per week. This is equivalent to 10.9 per cent of total working hours, or almost five standard 38-hour work weeks per year.

Why is unpaid overtime still so high?

The most common reason for working overtime was simply having too much work.

The findings align with what workplace expert Louise Gilbert has seen while working with large businesses since the right to disconnect law was introduced.

“This year, with organisations that I have worked with, [the right to disconnect] hasn’t been a big deal,” said Gilbert. “[Employees] are given too much work, which can be one of the causes of burnout that we need to really consider.”

Additionally, Gilbert has found that employees often choose to work unpaid overtime on their own, rather than being asked to by another employee.

“Culturally, people aren’t expected to work outside of their normal hours,” she explained. “They’re not contacted consistently outside of their set work hours… That doesn’t mean that they don’t feel like they have to work however.”

The right to disconnect targets situations where extra work is imposed by a boss or coworker. It assumes that restricting after-hours work discussions will eliminate overtime. However, many employees choose to work overtime voluntarily due to external pressures; pressures that this law doesn’t address.

That doesn’t mean that coworkers have no role in the overtime dynamic, however. Gilbert said that workplace culture has a significant impact on whether employees work overtime.

“What it comes down to is culture, because leaders set the tone from the top,” she explained. “It’s very important for leaders to be mindful of the culture that they’re creating. We would hate for the right to disconnect legislation to come into play, but then for disconnection to become career-limiting.”

Does the law reflect the way that small-business owners work?

The right to disconnect legislation presupposes that most people work a set number of hours and then clock off, after which no work is done at all. In reality, many people don’t work like this anymore – least of all small-business owners. 

As ISB has previously heard from entrepreneurs, many work outside of the 9-5 hours. This is both because this schedule suits them and because they feel they have to do it. 

“As the owner of the business, I have always felt that my work can crop up at any time, day or night,” says Jeremy Dawes, owner of website design business Jezweb. “We have flexible work-from-home (WFH) arrangements for our team. The office is there for any time and day the people want to go in or maybe have a client meeting. Everyone is set up with a workspace at home.”

Sole-trader Roxy Sinclair says she has made a “conscious decision” to forgo a set schedule.

“I prioritise family and health, slotting work in around that,” says the owner of Sinclair Communications. “Obviously meetings and some tasks need to occur at particular times but any planning, writing or research can be done whenever it suits.”

With the right to disconnect not yet in place for small businesses, only time will tell its effectiveness.

The post Overtime drops under right to disconnect – will it work for small businesses? appeared first on Inside Small Business.

1. Intentionally underpaying employees will become a federal crime

From 1 January 2025, intentional underpayment of wages or entitlements can be a criminal offense. Small-business employers will be subject to this legislative change.

ISB has previously reported on small businesses accidentally underpaying workers due to misunderstandings. We heard from small businesses and experts alike that the complex IR system can lead to mistaken underpayments. 

In response to these concerns from the community, the Fair Work Ombudsman has introduced a Voluntary Small Business Wage Compliance Code to help small businesses avoid criminal prosecution. The Code includes steps like “working out correct pay rates” and “seeking information from a reliable source about paying employee entitlement correctly”. If these steps are satisfied, then it’s unlikely that the employer will be found to have intentionally underpaid employees.

2. Tax and BAS agents will be under stricter ethical and operational requirements

Tax and BAS agents will have new obligations next year. These will apply from 1 July 2025 for tax practitioners with 100 or less employees, and 1 January 2025 for all other tax practitioners.

For small businesses, this will mean that your tax agents will be under stricter ethical and operational requirements. According to the Tax Practitioners Board, these include keeping proper client records, having quality management systems in place, and keeping clients informed.

3. “Introductory” classifications can only apply to employees for a limited time, under some awards

Some awards will have new rules for introductory classifications early next year. These classifications can now only apply for a limited time.

If you’re unfamiliar with introductory classifications, these refer to the first stage of a job, i.e. in an induction or training period. They often allow an employer to pay an employee below minimum wage, under the assumption that they are still gaining the basic skills and experience required for the job. The new laws will mean that employees can only be in this introductory stage, with below-minimum-wage entitlements allowed, for a limited period. 

The new time limit on introductory classifications varies between affected awards, but it will be applicable for a maximum of six months. 

A list of affected awards is available here. For all affected awards bar the Horticulture Award, the changes will take effect on 1 January 2025.

4. The ‘right to disconnect’ will apply to small businesses

From 26 August 2025, small-business employees will have the right to refuse work-related contact outside of regular business hours.

The laws already apply to businesses with over 15 employees, but are reportedly not having much of an impact. According to a survey by Indeed, 79 per cent of employees are still fearful of disconnecting from work-related messages after hours.

Additionally, many small businesses say they rely on flexible hours and integrated work schedules – meaning they have no set working hours. The legislation may therefore not be relevant to their working lives either.

Recent changes to know

A couple of key pieces of legislation have been passed in these last few weeks of 2024. These include a crackdown on unfair trading practices, a new banking code of practice, and new legislation making the reporting of cybersecurity incidents mandatory.

The post The 2025 legislative changes that small businesses should know appeared first on Inside Small Business.

The ‘right to disconnect’ gives employees the right to refuse work-related contact outside their normal working hours, and was introduced as part of a suite of changes to the Fair Work Act this past August. 

The laws are supposed to protect employees’ work-life balance – and had some businesses worried that their regular operations would be impacted. However, new research suggests that the ‘right to disconnect’ isn’t having much effect after all.

A new survey by job site Indeed found that 80 per cent of employees are regularly contacted outside working hours. Not only that, but 90 per cent of employees say they regularly work past their official finish time.

Employees too scared to disconnect

The survey found that 79 per cent of employees are still fearful of disconnecting from work-related messages after hours, due to expected negative repercussions.

Employees aren’t the only ones worried about what an after-hours disconnect could mean. Almost half of Australian employers – 47 per cent – feared a drop in employee productivity without some out-of-work communication. In fact, 55 per cent of employers said they would pay their employees extra to be able to make contact after hours. 

Notably, the ‘right to disconnect’ legislation excludes contact considered “reasonable”. This could be one reason why out of hours contact is still occurring at such high rates. The employers that Indeed surveyed considered urgent project deadlines, correcting an error, and personal matters (like extending a period of absence from work) “reasonable” reasons to contact an employee after-hours.

What it might mean

The stats suggest that many workplaces rely on both after-hours communication and after-hours labour, despite the fact that 52 per cent of workers said that it disrupts their personal life, and 30 per cent said it impacts their mental and/or physical health. 

The ‘right to disconnect’ laws don’t yet apply to small businesses. However, many say they rely on flexible hours and integrated work schedules, so it’s likely that the legislation won’t be relevant to their working lives either.

“Leaders and their teams should discuss and agree upon what constitutes reasonable after-hours contact, and if or when it should be compensated,” said Amanda Gordon, Workplace Psychologist at Indeed. “If everyone is on the same page regarding what is deemed ‘urgent’ and warrants contact, the legislation will serve them well.”

The post The ‘right to disconnect’ not improving work-life balance appeared first on Inside Small Business.

The survey found that only 28 per cent of the respondents believed the legislation would improve work-life balance for employees, while just 14 per cent believed it would enhance employee retention and reduce turnover.

The right to disconnect legislation, which came into effect last August for many employees in Australia, provides protection for individuals who do not monitor, read or respond to contact, or attempted contact, from their employer outside working hours, unless their refusal is unreasonable.

While the legislation has been hailed by some as pivotal in helping employees achieve work-life balance in the digital era, there were also concerns raised that the requirement to allow employees to fully disconnect once they’ve clocked off may force employers to overhaul their processes and practices. ISB has also heard concerns that the ‘right to disconnect’ may overshadow workplace measures that are just as important for striking work-life balance.

Concerns on compliance

The report also noted other concerns facing organisations today. Primary among them is with regards to compliance, as managing compliance requirements is now the biggest barrier to high performance for 30 per cent of organisations. In particular, almost two-thirds of survey respondents cited labour laws and regulations as their chief challenge, followed by data privacy and security (26 per cent).

Impact of flexible work

The report additionally highlighted the impact of flexible work as being the norm among many organisations. What is notable is that it found that flexible working has made no significant change to productivity for 52 per cent of organisations, while 36 per cent have experienced a productivity increase. Only seven per cent stated productivity had decreased as a result.

What is shaping the future of work?

With regards to the future of work, survey respondents said that digital technologies and AI are the most significant factors shaping the future of work in 57 per cent of organisations, followed by shifts in employee expectations (18 per cent).

The jobs situation

The survey also noted that the jobs market has remained steady, with 52 per cent of organisations actively hiring for multiple roles and 26 per cent hiring for specific critical roles only. However, 50 per cent shared that finding workers with the right skills and experience has been difficult, while 26 per cent shared that they’re experiencing general labour shortages.

Embracing DEI

On the matter of embracing diversity, equity and inclusion (DEI) in the workplace, 51 per cent of respondents shared that creating an inclusive culture was the DEI initiative most critical to organisational success, followed by enhancing diversity in leadership (22 per cent), and addressing pay equity (15 per cent).

“These results highlight the growing complexity crisis that Australian employers are navigating, including increasing compliance risk and the expectations of a boundless workforce,” said Brian Donn, Managing Director, APJ at Dayforce, Inc. “Fostering strong connections between an organisation and its people, as well as investing in efficiencies through strong processes and innovative technology, is critical.”

The post Employers pessimistic about ‘right to disconnect’ laws appeared first on Inside Small Business.

The legislation seems simple. Those who work for an organisation with 15 or more people can now choose to ignore contact from work after hours, without the fear of losing their job. For smaller businesses, compliance is still 12 months away.

On the surface, it seems like the perfect solution to not only address employee burnout, but also the lack of boundaries between work and home life. However, the ‘right to disconnect’ should not and must not be seen as a replacement for flexible work options.

Time-specific boundaries aren’t the only way to create work-life balance

While the ‘right to disconnect’ is supposed to empower employees, the one-size-fits-all approach fails to support workers who require flexibility to participate in the workforce.

Key groups reliant on strong diversity, equity and inclusion (DEI) policies, including women, neurodiverse individuals or those with a disability, all benefit and perform better when working arrangements can be personalised.

For example, many women (and men too) need to log on after hours to manage when work and home life collide. Whether it’s juggling the school run, taking care of sick family members or grabbing a few hours to watch the kid’s school concert – flexibility is critical.

Whereas, neurodiverse talent may feel more productive during non-standard working hours and may choose to complete ‘deep’ work at a time when they are most engaged.

Gartner research shows that when organisations provide radical flexibility – not just when and where you work, but with whom, on what and how much – the percentage of employees defined as high performers increases by 40 per cent.

While workplaces need to respect employee boundaries, a hard stop at 5pm won’t be the answer that supports all workers to achieve better work-life balance.

As a manager navigating this change, it’s important to work with all team members to ensure they understand how the legislation works in relation to flexible work policies. The ideal outcome should be to drive personalised discussions about when, where and how the work gets done.

Supporting your team to realise work-life balance

Employees with a positive connection to work often feel understood or cared for and have autonomy in all aspects of their role.

Employers should use this time as an opportunity to reset boundaries and help employees to establish a healthy relationship with work. Allowing individuals to be upfront about what flexibility looks like and how they’d like to work is key.

The best approach to achieve this is to help staff develop formal agreements outlining their preferred schedules or plans. Regular reviews will ensure employee, team and manager expectations remain aligned.

Encourage individuals to take the time to discuss and agree on what team norms and work styles are. This way no one will miss out on opportunities when they arise.

Finally, while having these conversations, managers need to recognise that at its core, the right to disconnect is a culture change. It requires managers and leaders to role model the desired behaviours for employees to learn from.

Until leaders and managers give their team permission to disconnect by doing so themselves, the behaviour change will be hard to implement.

A great outcome for all will be more mindful conversations and support for what employees need to thrive at work.

The post Why the ‘right to disconnect’ may miss the mark appeared first on Inside Small Business.

The only exception is if an employee’s refusal of contact is “unreasonable”. Factors determining whether a refusal is reasonable include the reason for the contact, how it was made, and the employee’s role.

Next steps for businesses

Earlier this year, ISB spoke to workplace advisor Sara Villella on how small businesses can adjust to the workplace law changes. Villella recommended conducting an audit or review on the potential impact of the right to disconnect on your business. She also recommended investigating practical measures that your business can take to comply with the law.

Moreover, the workplace advisor reminded small-business owners to consider the benefits of disconnecting, and discuss the importance of switching off with employees.

“When navigating these changes, it’s important for small-business owners to keep in mind the actual purpose of the proposed legislation,” Villella said. “That is, to protect our workforces – giving them the ability to not have to think about work after hours, allowing them to ‘switch off’ from work.”

The Council of Small Businesses Organisations Australia (COSBOA) have also launched a Small Business Peak Program to help small-business employers to navigate the new changes. The program comes in the wake of a survey that revealed 63.6 per cent of businesses didn’t know what is required under the new right to disconnect changes.

“The research highlights the low levels of awareness in the business community about the IR changes. This was reflected across all industry sectors, and demonstrates why Small Business Peak is so critical to the small business community,” said CEO Luke Achterstraat.

Penalties for non-compliance

If an employee believes their workplace is not complying with the laws, they can take the issue up with the Fair Work Commission.

“Like most employment matters, any dispute should first be discussed and sought to be resolved at the workplace level,” said Booth. “If that resolution does not occur, the Fair Work Commission (not to be confused with the Fair Work Ombudsman) can deal with disputes regarding the right to disconnect.”

According to a recent FWO statement, the Fair Work Commission has the power to make any order it feels is necessary when dealing with a dispute, other than issuing fines. The Fair Work Ombudsman, on the other hand, will be able to issue fines if an employer doesn’t comply with the Commission’s order. Penalties begin at $19,000 for individuals and $94,000 for a body corporate.

The FWO reminded businesses that general workplace protections will still apply in relation to the right to disconnect. This means that employees will be protected from coercion, undue influence or pressure, or adverse action that may arise around the refusal of contact.

More information about the right to disconnect is available here.

The post Employees have the ‘right to disconnect’. What now? appeared first on Inside Small Business.

In particular, three key changes that are set to take effect on 26 August pertain to the ‘Right to Disconnect’, Independent Contractor changes, and Casual Employment changes.

Right to Disconnect

As part of the Closing Loopholes changes, eligible employees will have the right to refuse employer or third-party contact outside of working hours, unless the contact request is required by law, though small-business employes will not be covered by the change until 26 August 2025.

The law states that certain matters must be considered when deciding whether the employee’s disconnection is reasonable or otherwise. These considerations include:

• the reason for the contact (or attempted contact
• how the contact (or attempted contact) is made and how much disruption it causes the employee
• any compensation (monetary or non-monetary) the employee receives to be available to work when the contact is made or to work outside their ordinary hours
• employee’s role and their level of responsibility, and
• employee’s personal circumstances, including family or caring responsibilities.

Independent Contractor changes

The Closing Loopholes changes also created new definitions to help determine not only the meaning of ‘employee’ and ‘employer’ but also determine if a worker is an employee or an independent contractor.

In particular, the changes focused on what is considered “the real substance, practical reality and true nature of the working relationship”, including the terms of the contract and how the contract is performed in practice. This is a change from the existing test which focuses mainly on the terms of a contract.

There are exceptions though, including employees and employers considered to be working within the national workplace relations system because their state referred their powers to make workplace laws to the Commonwealth. These will also not affect the meaning of ‘employee’ and ‘employer’ in other existing laws defining employment such as in taxation, superannuation, and workers compensation.

Casual Employment changes

The Closing Loopholes change also made changes to the definition of what is a casual employee.

The changes state that if a person is a casual employee when they start employment, the employment relationship has no firm advance commitment to ongoing work, taking into account a number of factors and that they’re entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract.

The new law also stated that employees classified as casual who were with their employer before 26 August 2024 will stay casual under the new definition unless they move to permanent employment, while for casuals employed from 26 August 2024, the new casual employee definition will apply.

Changes to an employee’s employment status shall be made through a conversion process or Fair Work Commission order or by accepting an alternative employment offer and starting work on that basis.

Further information on the Closing Loophole changes can be found at the FWO website.

The post Here’s how workplace laws will change next week appeared first on Inside Small Business.

In the ongoing debate over employees’ right to disconnect after core hours, a crucial aspect often gets overlooked: the balance between flexibility and the potential constraints such a policy may impose.

While the desire for a strict disconnection after five pm aims to protect employees from the encroachment of work into their personal lives, we must consider the other side. In an era where the traditional nine-to-five workday is evolving, enforcing a rigid schedule may not be the most equitable solution.

For those seeking flexibility, say the ability to attend a child’s sports carnival or handle a midday pick-up, a one-size-fits-all approach seems unfair.

The ability to adjust your schedule to accommodate personal needs is a cornerstone of modern work-life balance. Whether it’s staying late one evening to offset an early finish time the next day, employees should have the autonomy to make these decisions without unnecessary restrictions.

If we advocate for an absolute right to not be contacted after core hours, aren’t we inadvertently restricting the very flexibility that many employees, especially working parents value?

Moreover, consider the implications these policies pose for businesses that operate across multiple time zones nationally and internationally, a reality for many in today’s globalised world.

Mandatory disconnection policies present significant challenges to collaboration and productivity, hindering these businesses’ ability to deliver efficiently, ours included.

The question is, do we truly need legislation to govern our work habits? Perhaps we should trust individuals to navigate their workloads and workplaces responsibly, allowing self-regulation to prevail?

Those unhappy with their work conditions may choose to leave poorly managed workplaces, creating a natural system of checks and balances.

While the desire to protect personal time is understandable, it’s crucial not to undermine the flexibility that many employees seek.

The debate over the right to disconnect is not just about drawing boundaries between work and personal life; it’s about preserving the flexibility and fluidity that make modern workplaces thrive.

Preserving this flexibility is paramount to ensuring that the working world remains adaptable to the diverse needs of its workforce, which are changing every day.

The post Balancing flexibility and boundaries: re-thinking the Bill for After-Hours Disconnect appeared first on Inside Small Business.

The proposed legislation is intended to protect employees from being punished for refusing to take unreasonable work calls or respond to emails in their personal, unpaid time. By extension, it is designed to reduce employee stress levels and risks of burnout by limiting after-hours communications.

Given a recent report found the average worker was losing out on about $11,000 each year due to unpaid overtime, this proposed legislation would see greater protections in place for employees. Of course, employees can still choose to work after hours, and in some circumstances, after-hours work may be seen as ‘reasonable’.

Australia is not the first country to enforce measures to protect the right to disconnect from work. Many European countries have already implemented laws to address the blurring boundaries between work and personal life. From these, we know there have been some challenges in enforcing the right to disconnect particularly during a time where workers continue to push for flexible working arrangements – presenting a unique challenge for small businesses.

The following steps can support small-business owners to prepare themselves for the proposed changes:

• Consider the impact: Business owners should consider conducting an audit or review on the potential impact of a right to disconnect. For example, if your workforce had the right to not respond to calls or emails between 6.30pm to 8.30am, how might this impact your business operations? Consider whether these rights and protections need to be introduced into employment agreements and enterprise agreements – or conversely if agreements need to be amended to reflect the new legislation.

• Implement change: Now is the time to investigate some practical measures your business could take to ensure you comply with the proposed changes. It’s important to consider what your current policies and processes are for the use of technology out of hours as well as understand what you, your managers and team leaders expect of employees outside of hours.Take the time to ensure your management are ready for the proposed changes and what it means for their teams. Encourage your managers and team leaders to respect employee boundaries – educating them on the risk to the employee and the business should the boundaries be crossed.
• Talk with your team: Don’t forget to educate your employees on their rights and what you, as their employer, are doing to protect them. Make sure you have the right support mechanisms so that employees feel comfortable to raise concerns around their right to disconnect. Finally, continue to ensure employee wellbeing is a priority for your organisation, by providing relevant training that highlights the mental benefits of disconnecting from work and, where applicable, ensuring employee assistance programs are readily available to your people.

When navigating these changes, it’s important for small-business owners to keep in mind the actual purpose of the proposed legislation – that is to protect our workforces – giving them the ability to not have to think about work afterhours, overall allowing them to ‘switch off’ from work. Of course, most businesses and employers already do or want the right thing for their workforce – the new law simply would reinforce the need to protect employees, especially from those employers that do not.

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