COVID-19 Financial Support & Obligations
Wage Subsidy Scheme
COVID-19 Wage Subsidy August 2021
The Wage Subsidy August 2021 is a payment to support employers, so they can continue to pay employees and protect jobs for businesses affected by the move to Alert Level 4 on 17 August 2021.
Eligible employers can apply for a contribution towards the wages of their employees (or themselves, if they are self-employed) for a two-week period. They can’t apply for the same employee twice for the same period.
Applications for the Wage Subsidy Scheme open nationally from 9am on Friday 20 August 2021, with applications initially open for two weeks. Businesses can apply on the Work and Income website.
How to apply (Ministry of Social Development)
The Wage Subsidy is available to eligible businesses, organisations and the self-employed impacted by the move to Alert Level 4 on 17 August 2021.
To reflect higher wage costs since the scheme was first used in March 2020 the payments have been increased to:
- $600 per week per full-time employee.
- $359 per week per part-time employee.
Leave Support Scheme
The COVID-19 Leave Support Scheme is available for employers, including self-employed people, to help pay their employees who need to self-isolate and can’t work from home.
If employees have been told by a health official to self-isolate and cannot work from home, their employers can apply for the COVID-19 Leave Support Scheme.
This means the workers:
- can’t come into work because they are in one of the affected groups and have been told to self-isolate, and
- can’t work from home.
This support will be paid as a lump sum covering two weeks (businesses can reapply if required) of $585.50 per week for full-time workers and $350 per week for part-time workers.
From 24 August 2021, the payment increases to $600 per week for full-time workers and $359 per week for part-time workers.
Under changes to this scheme in 2020, businesses are no longer required to show an actual or predicted revenue drop or that their ability to support an employee was negatively impacted by COVID-19, to be eligible to access the payment.
Anyone who is unwell should call Healthline on 0800 611 116 or talk to their doctor or health provider. Businesses should encourage their workers to do this if they’re unwell.
Short-Term Absence Payment
The COVID-19 Short-Term Absence Payment is available for businesses, including self-employed people, to help pay their workers who cannot work from home while they wait for a COVID-19 test result.
A COVID-19 Short-Term Absence Payment is available at all Alert Levels to employers to pay workers who follow public health guidance and are staying home while waiting for a COVID-19 test result.
It’s also available to eligible self-employed workers. To be eligible, workers need to be unable to work from home and need to miss work while waiting for the test results.
There’s a one-off payment of $350 payment for each eligible worker.
This payment increases from 24 August 2021 to $359 for each eligible worker. Employers or the self-employed can apply for any worker once in any 30-day period.
Anyone who is unwell should call Healthline on 0800 611 116 or talk to their doctor or health provider. Businesses should encourage their workers to do this if they’re unwell.
COVID-19 Financial Support and Employment Law obligations
Employment law has not changed.
The financial support schemes operate alongside existing employment law. Employment obligations have not been removed or changed by employers accessing COVID-19 financial support.
Employers must ensure that they are meeting their pay obligations under both employment law and the requirements they agreed to when applying for these COVID-19 financial support schemes.
Employment Law obligations during COVID-19 alert level restrictions
- Under employment law, employees must be paid for each and every hour that they work at their agreed wage rate.
- Employers and employees can temporarily or permanently agree to vary the agreed rates of pay and hours of work. Any change requires good faith consultation and written agreement signed by both parties.
- Employers must pay employees as if they were in continuous employment.
- If employers can operate their business during alert level 4, they must offer employees work as usual. If they can’t offer employees work, employees must be paid their full pay.
- If employers can operate their business during alert level 4, and employees choose not to work (for whatever reason), employees are not entitled to payment: but employees may ask to be paid sick leave and/or annual leave and/or any subsidy available.
- If employers cannot operate their business due to COVID-19 alert level restrictions, employees must receive their full pay.
- If employers cannot pay 100% of the employees’ wages, and employees cannot provide agreement, employers must follow a restructure-type process: involving consultation and feedback.
COVID-19 Wage Subsidy Scheme and Obligations
- Any wage subsidy does not override employment law, including (but not limited to) the Employment Relations Act 2000, Minimum Wage Act 1983, Holidays Act 2003 and Health and Safety at Work Act 2015.
- Employers must discuss their application with their named employees and gain their consent to information sharing.
- Employers ought not unlawfully compel or require any of the named employees to use their leave entitlements for the period they receive the subsidy in respect of those employees.
- From the date of the wage subsidy application, the employer must retain the named employees for the period they receive the subsidy; and use the subsidy to support paying the ordinary wages and salary of the named employees, in accordance with their employment agreements and statutory obligations, for the period you receive the subsidy.
- Employers remain responsible for paying the ordinary wages and salary of the named employees.
- For the period employers receive the subsidy, they will:
- use their best endeavours to pay at least 80 per cent of each named employee’s ordinary wages or salary; and
- pay at least the full amount of the subsidy to each named employee; but
- where the ordinary wages or salary of a named employee as at 16 August 2021 is lawfully below the amount of the subsidy, pay the employee that amount.
- Ordinary wages or salary means:
- in relation to a named employee, the ordinary wages or salary as specified in the employee’s employment agreement or in accordance with relevant statutory obligations as at the date you apply for this subsidy; or
- in relation to those who are a sole trader or self-employed person, the weekly amount that they regularly pay themselves as at the date they apply for this subsidy.
Complaints about employers
- Fill out the following form if you believe your employer is receiving the wage subsidy or Leave Support Scheme but not meeting the conditions they agreed to.
- Wage Subsidy Scheme Complaints About Employers Form (Employment NZ)
It is a situation caused by COVID-19 and the lockdown, with employees bringing forward complaints relating to unjustified redundancy, wage cuts, enforced taking of annual leave, and issues surrounding the wage subsidy.
However, your employment rights have not changed because of it.
If there are changes in the workplace, it can be helpful to seek legal advice.
Remember, you only have 90 days to raise a personal grievance with your employer.
We provide an initial consultation free of charge, where we will help you to find out if your rights are being met.
Resurgence Support Payment
Resurgence Support Payment (RSP) applications opens nationally from 8am on Tuesday 24 August 2021. Applications open for one month after a nationwide return to Alert Level 1.
Businesses and organisations are eligible if they experience a 30% drop in revenue over a seven day period after an alert level increase and meet other eligibility criteria. This drop is compared to a typical seven-day period in the six weeks before the increase in alert level. Seasonal businesses should show a 30% revenue drop compared with a similar week the previous year.
The decline in revenue must be a result of the specific alert level change, not just COVID-19 in general. Businesses must have been in operation for at least six months to be eligible. Charities, not-for-profit organisations, the self-employed and pre-revenue businesses, such as start-ups may also be eligible.
This payment is not a loan, so does not need to be repaid. The payment must be used to help cover business expenses such as wages and fixed costs.
There have been some recent changes to the eligibility criteria for commonly owned groups. A commonly owned group generally consists of businesses that have the same owners. Some individual businesses or organisations within a commonly owned group may now be eligible for RSP. You can find examples of commonly owned groups and more eligibility criteria for the RSP on the Inland Revenue website.
Businesses can also calculate how much they may be entitled to and how to apply.
Eligibility for the Resurgence Support Payment (Inland Revenue)
Disclaimer – The information above provides an overview of some of the COVID-19 financial support and obligations that apply by law to employers and employees.
For the latest information and updates please visit:
www.employment.govt.nz
www.workandincome.govt.nz/covid-19
www.covid19.govt.nz
