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With the stress that COVID-19 and lockdowns are causing for many business owners, it pays to remember what rights and obligations you have as an employer.
We have received a lot of questions about COVID19 level 4 lockdown and the wage subsidies.
In this page, we have put together a few frequently asked questions that we have received from employers who are struggling during these uncertain times.
Businesses cannot make an application to provide an Alert Level 4 service – instead it is up to the business to check whether they meet the definition of an Alert Level 4 business or service.
Operating safely includes fulfilling all other health and safety obligations.
Unite against COVID-19 has further information on safely doing business at Alert Level 4.
Doing business at Alert Level 4 — covid19.govt.nz
If you can operate your business during alert level 4, and your employees choose not to work (for whatever reason), these employees are not entitled to payment; but they may ask to be paid sick leave and /or annual leave and/or any government subsidy available.
Under employment law, employees must be paid for each and every hour that they work at their agreed wage rate.
Permanent employees must be paid for at least their guaranteed hours every pay period.
If you can operate your business, you must offer your employees work as usual and according to their employment agreements.
If you cannot offer them work, you must pay them their full pay unless otherwise agreed to by both parties in writing.
Employers must pay employees as if they were in continuous employment unless otherwise stated by their employment agreement.
If employers cannot operate their business due to COVID-19 alert level restrictions, employees must receive their full pay unless otherwise agreed to by both parties in writing.
You may be able to access to COVID-19 wage subsidy to help continue paying your employees’ wages.
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 a written agreement signed by both parties.
In most cases if employers cannot pay 100% of the employees’ wages, and employees cannot provide an agreement, employers must follow a restructure-type process: involving consultation and feedback.
People have important and legitimate responsibilities, personal or otherwise.
An employer must allow an employee to take annual holidays within 12 months after the date on which the employee’s entitlement to the holiday arose.
If an employee wants to use their entitled annual leave, employers can’t unreasonably refuse this.
An employer can say no if an employee wants to take annual holidays in advance.
Annual leave is defined in the Holiday Act 2003 as being for rest and recreation purposes.
When annual holidays are to be taken by the employee, it should be done by agreement.
You can’t tell your employees to take annual leave to cover for a downturn in business caused by COVID-19 unless otherwise agreed by the employees in writing.
If you and your employee cannot agree on when the annual leave is to be taken, and you have given the employee 14 days’ notice, you can make the employee take leave.
You can also make employees take leave if you regularly closedown for a particular period every year, remembering to give 14 days’ notice in this case as well.
Remember, any wage subsidy does not override employment law.
Therefore, you should be paying 100% of the employee’s normal wages.
Normal Wages = the wages specified in the employee’s employment agreement.
But if 100% is not possible then 80% is the desired outcome. You must try your absolute hardest to pay 80% which you can only do so after you have consulted in good faith and gained an agreement from your employee in writing.
Yes, you must consult and act in good faith. You must put a proposal to the employee and try to get their agreement.
You cannot unilaterally vary any terms and conditions of their employment including their remuneration.
The granting of a wage subsidy does not override an employer’s existing obligations under the Employment Relations Act 2000.
An employer cannot make any changes under any employment agreement, including to rates of pay, hours of work and leave entitlement, without the written agreement of the relevant employee.
Yes, you can if your business met the eligibility requirements to apply for the wage subsidy and provided the casual member of staff would have been expected to work during the time you will receive the wage subsidy.
Note: We recommend all employers review the wage subsidy declaration thoroughly prior to applying for the Wage Subsidy.
The wage subsidy is designed to support employers throughout New Zealand, so they can continue to pay employees and protect jobs for businesses affected by COVID-19.
You must provide work to these employees according to their employment agreements, and pay them at their agreed wage rate.
If your employees’ ordinary wages is lawfully below the amount of the subsidy, then you can use the balance of the wages subsidy for other affected staff – i.e. to top up for other full-time employees’ wages.
You should average their hours out over the last year. If this average is 20 hours or more, you can apply for the full-time rate, and if it’s under 20 hours the part-time rate. If they have worked for less than a year, you should average the hours worked during their total employment period.
Yes. As an employee who is employed by two or more different businesses, can receive the wage subsidy from multiple employers, as long as the usual criteria are met.
You cannot unlawfully compel or require any of the employees named in your application to use their leave entitlements for the period you receive the subsidy in respect of those employees.
Yes, if that is what the employee wants and ask for.
Take note that annual leave is calculated based on the greater of Average Weekly Earnings (AWE) or Ordinary Weekly Pay (OWP).
If the employee is in receipt of the subsidy their OWP = $600 (Full-time employee) / $359 (Part-time employee), not their normal pre COVID wages.
So, they may see a lesser amount than they were expecting.
The wage subsidy is designed to support employers throughout New Zealand, so they can continue to pay employees and protect jobs for businesses affected by COVID-19.
If you applied for and received a wage subsidy, you cannot make named employees in your application redundant for the duration of the wage subsidy.
Yes. You can make an additional application for any of your employees whom you haven’t already applied for.
No, when you apply the wage subsidy you also declare that you will only use the subsidy for the purposes of meeting your named employees’ ordinary wages and salary.
However, you may apply Resurgence Support Payment (RSP) if your business met the eligibility criteria. RSP is a payment be used to help cover business and organisations expenses such as wages and fixed costs through Inland Revenue (IRD).
Yes because it is good faith but as part of the application you must have discussed this application with the employees named in it and the employee must have consented to a number of matters recorded in the declaration:
Mask wearing is now a public health requirement, so staff in essential services can be required to wear a mask. Non-compliance could result in disciplinary action being justified.
Vaccines are now a compulsory requirement for the employees of employers which fall under the Covid-19 Public Health Response (Vaccinations) Order 2021.
Otherwise an employer could not generally mandate vaccination unless it was a legitimate requirement of the role for health and safety reasons.
In either of these situations, if an employee refused to be vaccinated, this could potentially lead to termination of employment if the employer was unable to accommodate alternative working arrangements.
Yes, subject to there being a substantive justification, and the employer following a fair and reasonable process, including consulting with employees before making any decisions.
However, if you applied for and are receiving the wage subsidy, you cannot make named employees in your application redundant for the duration of the wage subsidy.
If an employee refuses to comply with the rules, for example refuses to wear a mask (without a medical exemption), then disciplinary action could be taken. This could include suspending the employee if the non-compliance continues.
If they have already resigned from their previous employment and have agreed a start date, you are legally obliged to honour that, unless both parties agree otherwise.
If they are due to start during the lockdown, you will need to discuss alternative ways of giving them work to start.
Be sure to provide adequate on-boarding support, such as Code of Conduct advice, support to work remotely, health and safety advice and advice on information security.
If an employee has resigned and later seeks to withdraw or rescind that resignation, you can choose to accept their request, but are not obliged to do so.
In considering whether to agree, you should weigh up whether doing so would impact others (such as where arrangements have been made to fill the position).
Even where arrangements to fill the vacancy have been made, you may be able to retain the employee in an alternative position.
You should consider whether you were likely to have extended this, if the workplace restrictions had not been in place.
In many cases the reason for the temporary appointment remains, so an extension would be appropriate.
Or you can consider whether you may be able to redeploy existing employees to fill this need.
Otherwise, the fixed term can be allowed to expire, subject to necessary notice having been provided.
Yes, you agree to repay the subsidy or any part of the subsidy paid to you if:
