Ben Thompson (left) and David Elia

The high-profile dispute between hospitality industry super fund Hostplus and onboarding platform Employment Hero is ensuring that the issue of employee onboarding platforms gets close scrutiny from the government.

“The government has made it clear that employee onboarding platforms should not undermine stapling,” Minister for Financial Services Stephen Jones told Investment Magazine in a statement.

“We are reviewing feedback from consultation on whether more needs to be done to ensure the intent of stapling is achieved.”

One of the focuses of the review will include whether onboarding platforms should be allowed to accept advertising revenue from super funds they promote to new staffers on their site.

Stapling was introduced with the Your Future Your Super (YFYS) legislation which came into force in 2021, with a goal of reducing the incidences of employees having superannuation accounts with multiple funds.

The impact of stapling was more marked after the end of a trial period, in November 2022. But as an analysis of the impact of stapling in a column in Investment Magazine noted in February there has been no material drop off in the number of accounts in Australia.

No structural impact

While this could be a result of many factors including the net 500,000 plus new migrants who came into Australia in the last financial year, indications are that the stapling legislation may be affecting some funds – such as the Qantas employee fund – but is yet to make a major structural difference on the total number of accounts.

The issue of employee onboarding platforms potentially undermining the impact of the stapling legislation was flagged in a review of the YFYS legislation, which was released a year ago.

“The review has also uncovered inappropriate behaviour where software providers are not only undermining stapling, but also directing employees towards products that are associated with the software provider,” Jones noted at the time of releasing the Treasury review.

“This behaviour should cease voluntarily,” he warned.