Q & A
The COVID-19 Wage Subsidy will be paid at a flat rate of:
•$585.80 for people working 20 hours or more per week
•$350.00 for people working less than 20hours per week.
The subsidy is paid as a lump sum and covers 12 weeks per employee. This subsidy is for wages only. It is to help you keep your staff employed while you consider changes that may be needed while the disruption continues, and to ensure the future viability of your business. Businesses can only get this subsidy once.
COVID-19 Leave Payment
Self-isolation is an important way to slow the spread of COVID-19. From 17 March 2020 the COVID-19 Leave Payment will be available to support people financially if they need to self-isolate, cannot work because they are sick with COVID-19 or cannot work because they are caring for dependents who are required to self-isolate or who are sick with COVID-19. The COVID-19 Leave Payment will be available for eight weeks from 17 March 2020. Employers can apply for this more than once. It will be paid to employers who have eligible employees and they must pass the payment onto their employees in full.
Q. If I’m an employer of a registered charity, incorporated society, non-government organisation, or post settlement governance entity am I entitled to apply for the wage subsidy for my employees?
Yes, you can apply for the wage subsidy if your business has been adversely affected as a result of COVID-19 and you are struggling to retain your employees.
Q. If I’m an employer of a registered charity, incorporated society, non-government organisation, or post settlement governance entity am I entitled to apply for the leave payment for my employees?
Yes, you can apply for the leave payment if your employees are required to self-isolate because of Ministry of Health Guidelines and cannot work from home. Employees may not be able to work from home because: of the nature of their occupation e.g. trades people or you cannot provide employees the ability to work from home e.g. no access to laptops. Or they have been diagnosed with COVID-19
Q. Do I have to take my annual leave if asked?
Yes, but only if done right. You accrue leave at the end of the 12 months, so anything on your payslip before then you can't be forced to take. An employer must consult you first. There must be a "good faith" attempt to agree a solution. If this isn't successful the employer has to give you at least 14 days’ notice that they require you to take leave.
Q. Can I take unpaid leave instead?
Yes, by agreement.
Q. Can my planned leave be cancelled if I'm working in an essential business?
No, your leave can't be cancelled without agreement. You could also agree to defer it. Pragmatically speaking, this is a crisis and you may want to consider delaying as you can't really go anywhere.
Q. Do I have to take my annual leave if the business is receiving the wage subsidy?
You do not have to take annual leave if the employer is receiving the wage subsidy. The Government has been clear in its most recent clarification an employee cannot be forced to take leave in order to receive the subsidy. It is intended to help pay an employee's salary and cannot be conditional on taking annual leave.
Q. Does my subsidy go to me or the business?
It goes to the business to help meet wage needs.
Q. Can I be made to take some of my leave in order to help the subsidy top up my wage?
It wouldn't be fair for an employer to do this but it could be done by agreement.
Q. Are workplaces able to get the subsidy for casual workers?
An employer can apply for the subsidy for casual employees.
Q. What happens in the situation where some staff are being asked to take annual leave but others are receiving 80 per cent of their wage?
It depends on the circumstances. It may be some employees receiving 80 per cent can work from home and they have reached agreement with the employer. Whereas those asked to take annual leave (subject to what we said before) may not be able to, so an agreement to do this may help. You may work in the non-essential part of the business while others are deemed essential.
Q. My workplace has received the wage subsidy. However, rather than paying me the 80 percent minimum of my normal income they have reduced my working hours so I will effectively be paid by the subsidy with no top-up. Isn't this against their obligations?
Any reduction in hours below your normal level has to be done by agreement. But in the circumstances this is something a lot of employers are doing to help manage their revenue loss. If the employee has agreed then this would be legal, but only if the employer passes on every cent of the wage subsidy. The issue is that the 80 per cent minimum is not an absolute requirement. Employers have to use best efforts to pay it. If no agreement is possible, then a fair and proper process, like a restructure of hours and tasks, is also possible but it must be done in consultation with staff. Redundancies, ultimately, could be on the table too.
Q. We have been told the money "simply isn't there" to top us up to the 80 percent, therefore we get nothing, is this right?
The government has asked employers receiving the subsidy to make their best efforts to achieve the 80 percent and if not possible they need to be paying the subsidy at a minimum. But businesses beware, not possible is a high threshold. Employers should be talking to their employees and spelling out what they are facing. Employers need to be able to show they acted reasonably.
Q. Can my workplace use a force majeure (an act of god clause) not to pay us?
No. There are, however, agreements which contain suspensions-without-pay clauses for exceptional circumstances. One of those is usually a pandemic. It's currently untested law as to whether a suspension without pay now would be legal when challenged. It is something some employers are turning to. The key, again, is to consult prior to using it.
Q. Pre-Covid-19 I had a contract which guaranteed eight hours of work a week but I was normally doing between 24 and 50. Since the lockdown I am only being paid for the eight. What am I entitled to?
The company should be attempting to find an average hours figure and pay on that basis. A helpful period for the average income could be eight weeks. This has been accepted in the past by labour inspectors as a fair snapshot.
Q. My company is reducing its employee's wages. They're using a percentage system that matches three different salary bands. I will get 10 percent less effective as of 1 April. Is this legal?
It is if the reduction has been agreed. There should have been an open discussion with employees which allowed them to signal their agreement. If that wasn't the case, then the next option for an employer may be to consult with staff around why the reduction is required and provide them with an opportunity to comment.
Q. If an essential business is staying open during the four-week lockdown period but only requires a skeleton staff can they instruct staff to stay home and not pay them for it?
Any other day if they send you home and they can't meet your agreed hours then they must pay for it. However, you can agree to such a change. This is an area where you will likely need more legal advice.
Q. I was on a fixed term contract which ended appropriately. However, the business is going into a shutdown and I'm worried I'm not going get my notice period paid.
You have the right to be paid your notice period. The shutdown does not impact it.
Q. I was due to start a new job next week and had signed the contract. Yesterday they rang to say my start date was postponed indefinitely while they sorted out the burden of the alert level 4. Can they do this?
The start date can be moved by agreement but effectively you are covered by the law having signed the contract. Given you are a signed up employee, they should either be providing you with work or applying for the subsidy.
Q. My employer has offered us being made redundant now or employed at less than 50 percent of salary for the next 12 weeks to take advantage of the subsidy, then be made redundant. Is this legal?
No. The employer has given a clear indication you are to be made redundant. There are also duress issues here too. It doesn't mean there can't be full and frank discussions but already signalling you're going to take the wage subsidy but everyone will be made redundant still is very high risk.
Q. What if the company I work for says it has no money to pay wages at the moment?
They should be trying to get the subsidy. But, ultimately, if the business goes bankrupt you are going to lose most of what you are due.
Q. If I take my annual leave by agreement now will it be worth more than in three months?
That's likely, given employers are reducing hours and pay.
Q. Can an employee refuse to return to the workplace at Alert Level 3?
An employee who can work from home at Alert Level 3 should not be obligated to return to the workplace as this is not in accordance with government guidelines at Level 3.
Someone who is sick with Covid-19 or has been identified as close contact of someone with Covid-19 should not be attending work at any Alert Level.
Q. An employee says they are unable to attend work as they have no childcare available.
Schools (up to year 10) and ECE centres will be open under Alert Level 3. Difficulties may arise if an employee’s typical afterschool care is not available so you may need to agree reduced hours with the employee. Further, because attendance at schools is voluntary,
employees may decide that in order to mitigate risk they want to stay at home and look after their children, rather than work. If the child of an employee is “high-risk” so unable to attend school / childcare (or the employee wishes to keep their children at home) you should discuss with the employee what arrangements can be made. This can include redeployment to a role which can be completed from home, use of annual leave, special leave or even unpaid leave. If you are receiving the wage subsidy then you should pass this onto the employee or use it to pay annual leave.