Back in Level 4, with rising cases and places of interest, it looks almost certain that the Level 4 lockdown will continue.

I thought I would share some lessons from the last lockdown, and what the Employment Court rulings have since indicated we should do during this one:

• Any decisions that are taken around reduction in wages and/or hours must be done in good faith and following a consultation process. This process must be fair and open and offer the opportunity for staff to consider and respond to your proposal.
• Any agreement to a change in the terms and conditions of employment must be recorded as a Variation to their Individual Employment Agreement and be signed by both parties.
• The entire wage subsidy has to be passed on to staff as wages. If you have someone who usually earns less than the entire subsidy then you can pay them their usual wages and use the rest to top up others.
• You can’t make people take annual leave, although with 14 days’ notice you can require them to take their entitled leave (as opposed to accrued leave). You can ask if they would like to take leave and/or use lieu days
• Whether someone is entitled to pay will depend on whether they are both willing and able to work. Can they do their work from home? Are they willing to work from home? Do they have the capacity to work from home if they have small children or other dependants to look after?
• Even if the staff member can’t work from home, e.g. café worker, if you are entitled to the wage subsidy then you need to apply for this and pass it on to the employee.

Financial Support

There are a number of financial assistance packages that are available through the Government for businesses, self-employed people or sole traders. I have listed them below but recommend you check whether your specific circumstances allow you to qualify. Either look at the Government website or talk to us.

If you are eligible you can apply for both the Wage Subsidy and Resurgence Support Payment, but these cannot be done in conjunction with the Leave Support Scheme and Short-Term Absence Payment. Please see below.

Very important: If you are going to apply for a subsidy, ensure you retain documentation to support your application as you may be asked to provide this at a later date. If a subsidy is received for an employee and part of it is used for someone else, ensure you also have accurate records for this.

Wage Subsidy Scheme (WSS) August 2021

The Wage Subsidy August 2021 declaration was released this morning (20 August) by Work and Income New Zealand. Whilst there are not many changes when compared to previous declarations, the date of application is very important.

Eligibility will be assessed over 14-consecutive days. Businesses must have had, or are predicting to have a decline in revenue of at least 40% over the period 17 August 2021 to 30 August 2021 (inclusive), compared to a 14-day consecutive period of revenue in the six weeks immediately prior to 17 August 2021. Or, for highly seasonal revenue, the comparator is the same 14 consecutive days in 2020 or 2019. Accordingly, some businesses may need to wait to see to see whether they are going to meet this threshold.

Entitlements assessed at the date of application. Employers remain responsible for paying the ordinary wages and salary of the named employees, using their best endeavours to top this up to at least 80%. The ordinary wages or salary of an employee will be assessed at the application date. Accordingly, if employers are considering proposing changes (temporary or permanent) to hours of work for example, this could be done in advance of the application.

By not rushing to apply for this wage subsidy, employers can assess the revenue test period and use this time to consider their workforce needs, including whether restructuring or temporary changes to employees’ hours are required to get their businesses through the ongoing uncertainty. Any such changes can be made, by way of consultation in accordance with good faith obligations, in advance of the application.

If you need to make changes to employee entitlements after applying for the subsidy, you will need the employee’s written agreement to those changes. This would add a layer of complexity to the consultation process. If an employee refuses to give their written agreement to these changes, their employers may need to consider their redundancy, which may trigger the obligation to pay back the wage subsidy for that employee.

The subsidy payable has been increased to reflect the increase in wage costs since the scheme was used in March 2020. Businesses will be eligible for $600 per week per full time equivalent employee and $359 per week per part time employee.

The Wage Subsidy will be paid as a two-week lump sum. Applications open on Friday 20 August 2021, with the first payments usually available three days later.

Exclusions: If an employee is already receiving a Short Term Absence Payment or a Leave Support Scheme payment, the employer is not eligible to receive the Wage Subsidy in respect of that employee.

More information can be found here.

Resurgence Support Payment (RSP)

A Resurgence Support Payment is available if businesses incur a loss of 30% of revenue or a 30% decline in capital raising ability over a 7 day period as a result of the Alert Level increase. Eligible businesses can apply to receive the lesser of:

• $1,500 plus $400 per full time equivalent employee, up to a maximum of 50 full time employees (a total of $21,400);
• or four times the actual revenue decline experienced by the business.

The payment must be used to help cover business expenses (which can include employee wages and other fixed costs).

Receiving any other Government Covid support does not affect eligibility for the RSP.
Applications will open at 8am on 24 August 2021.

More information can be found here.

Short-Term Absence Payment (STAP)

The STAP is available at all alert levels. It provides a one-off payment of $350 to help pay for workers who cannot work from home while they wait for a Covid19 test result. The business must apply for the payment within eight weeks of the eligible worker receiving the test and can only apply for it once, for each eligible worker, in any 30 day period. It is also available to self-employed workers.

More information can be found here.

Leave Support Scheme (LSS)

This provides a two-week lump sum payment of either $585.50 per week for full time workers (more than 20 hours) or $350 per week for part time workers (fewer than 20 hours per week) who are required to isolate and cannot work from home.

The LSS payment must be passed on to the employee and the employee must be retained for the period that the business receives the LSS for that employee. If you receive the LSS for an employee who returns to work in less than two weeks, you will need to repay the remaining amount or reallocate it to another eligible employee.

Currently, 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 LSS.

More information can be found here.

Other Support

Other forms of support, such as loan and debt schemes available to businesses, can be found here.

We're here to help

We are open as normal and available for any questions that you have on the above or any other HR matter. We are happy to talk through your particular scenarios and can offer practical, sound advice to help you with any situations.