We've had many different questions and scenarios over the past three days about the financial support available for staff. At this point we're still responding best we can with the information available, which is being constantly updated.
Further announcements are expected once we move to COVID-19 Alert Level 4 at 11.59pm tonight.
The following is a summary of what we understand so far:
The Wage Subsidy
This is a subsidy that businesses who have had or are expecting to have more than a 30% impact on revenue in any one month between January and June 2020. For example, if May 2020 is more than 30% less than May 2019 and this is because of COVID-19, you're eligible.
The Wage Subsidy is paid to the employer as a lump sum to be used towards helping pay wages. It is a subsidy for the 12 weeks from 17 March 2020.
Staff are paid this subsidy as wages so any amount paid is subject to tax and usual deductions. It should be treated as earnings and included in any leave payment calculations. You could also set up a special payment code in your payroll.
The expectation is that the employer makes best efforts to retain employees and pay them a minimum of 80% of their normal income for the period this subsidy applies for. How much you pay will depend on your business circumstances and whether staff can work in full, in part or not at all.
It would not be recommended to pay staff less than the subsidy unless their ordinary earnings were a lesser amount – the subsidy is not intended to provide extra earnings.
If you've applied for and been approved a Wage Subsidy the questions to consider are:
- Are staff working and how many hours?
- Could the business help with any top up of pay for staff who are working less than their normal hours? Consider this for just the 4 weeks of the initial lockdown to start with.
- If staff cannot be topped up to full pay could they use annual leave or alternate holidays or any other paid leave entitlements they might have (but not sick leave).
- How will you remunerate staff who are ‘on call’?
Our recommendation is to talk to your staff individually. Understand what work they might / might not have to do and what their circumstances are. There is opportunity to make decisions on an individual basis, but we would not recommend doing this at the expense of ensuring others are receiving at least their ordinary earnings or as a minimum the subsidy amount.
At this stage this payment is only for staff who:
- Need to self-isolate due to COVID-19 in accordance with Ministry of Health guidelines or direction.
- Cannot work because they are diagnosed as sick with COVID-19.
- Cannot work because they are caring for dependent/s who are required to self-isolate or are sick with COVID-19.
At present there is no other subsidy or payment that we are aware of that is available for staff who could otherwise work (particularly in essential industries) if it were not for:
- Health and safety reasons that prevent them from working.
- Care of dependent/s.
- Vulnerable or ‘at risk’ persons in their same residence.
- Staff who rent (and who do not have a mortgage).
Take care out there (and at home), be nice to yourself and others, and remember we will get through this.
Many more questions will arise. We'll update you all again when we can but in the interim if you have urgent questions please get in touch with the team 06 878 5454 or firstname.lastname@example.org
Official sources of COVID-19 information
- The New Zealand Government's Official Source of Information
- Hawke's Bay COVID-19 Response from Hawke's Bay Business Hub
- COVID-19 Updates from Hawke's Bay Chamber of Commerce
- PlanA Consulting COVID-19 Information for Businesses
- MBIE – The Kiwi Business Boost
- MBIE – COVID-19 Information For Businesses
- Ministry of Health coronavirus up-to-date guidance
- Ministry of Health workforce pandemic influenza guidance
- Ministry of Health coronavirus questions and answers
- Ministry of Health coronavirus self-isolation guidance
- Ministry of Health coronavirus advice for travellers
- Employment during and after disasters
- Business.govt.nz emergency planning
- Worksafe workplace preparedness for novel coronavirus
- Protect yourself against coronavirus poster
- Protect yourself against coronavirus poster - simplified Chinese
- For any further questions about employment rights and responsibilities, contact Employment New Zealand