Push for 'Opt Out' in Workplace Giving

THE wide-scale adoption of “opt-out” workplace giving programs could push the growth of workplace giving in Australia, says Non Executive Director and former CEO of The Australian Charities Fund Ted Kerr.

Kerr said an opt-out process involved donations being deducted out of an employee’s pay, unless they elected for it not to happen.

“Currently, an employer can offer opt out only to new employees,” he said.

“This works by including in the employee’s offer of employment letter details of the amount to be deducted each pay day.

“The employee gives their written consent when agreeing to their employment terms (unless of course they choose not to participate). But this approach is not possible for existing employees.”

He believes the Federal Government could assist in promoting this process by amending section 324 of the Fair Work Act 2009.

“We believe section 324 should be amended to allow an employer to make modest workplace giving deductions from an existing employee’s salary provided they have first given the employee ample notice of their intention to do so and a clear and simple process by which the employee can choose not to participate,” he said.

“It might be argued this would compel employees to give. But this is not the case. Successful opt-out schemes depend on strong messaging from senior leadership around their vision for engaging staff in a common purpose of helping the community by providing an easy way for everyone in the organisation to play a part (but making it easy for anyone to elect not to participate).

“An essential element of an opt-out scheme is strong communication.”

Kerr said studies of opt-out programs, not just relating to giving, found there was a much higher take-up rate for opt out than opt-in schemes – about 70% for opt out and 20% for opt in.

“Research The Australian Charities Fund has done on opt out workplace giving programs for new employees confirms these findings,” he said.

“So there is very significant potential for growing workplace giving if we were to see the widespread adoption of opt out programs.”