On 17 March 2020, the Government unveiled a support package valued at $12.1 billion to support the New Zealand economy and its response to the COVID-19 pandemic.
The positive news for employers is that almost half the value of the support package is to be spent on wage subsidies for those businesses that are affected by COVID-19. Part of the package also includes a sick leave scheme that will support workers financially while they self-isolate, or while ill, so they can limit the exposure without feeling compelled to work for financial reasons.
Eligible employers can apply for the wage subsidy immediately. Employers need to apply online for the subsidy which will be paid in a lump sum provided they meet the eligibility criteria. See the link to the application on the Work and Income website at the bottom of the page.
To be eligible for the subsidy:
How much will be subsidised?
If your business is eligible for the subsidy, you will receive a flat rate depending on the number of employees you have in the business up to a maximum of $150,000.00.
The calculation will be based on a 12-week period (roughly March to June) and will only be paid once.
This subsidy covers wages only and is designed to assist the business while it considers changes that may be needed while the disruption continues.
Sick Leave payment
The Government has also announced leave payments to assist where employees need to self-isolate. These payments are designed to help employees who cannot work due to COVID-19 and to provide some assurance to further stop some employees going to work and therefore reducing the spread of COVID-19. Employers are eligible to apply for these payments (including self-employed people, contractors and sole traders) where they have eligible employees. There is no limit on how many times an employer can apply for these payments provided the eligibility criteria is met.
An employer can apply for employees working full time, part-time or under casual arrangements, and for contractors who are legally eligible to work in New Zealand and who:
The leave payments are the same figures for the subsidised wage payments and also paid at a flat rate. Employers can apply for up to:
If an employee is required to self-isolate, the employer will be able to apply for a maximum of 14 days. However, as an employee may be required to self-isolate more than once, the employer can reapply on as “as needed” basis. Where an employee is required to take sick leave to look after a dependent who has been diagnosed with COVID-19, this payment will cover the entire time the employee is off work, however, the employer will be required to reapply every 14 days.
If the application is successful, the employer will receive the payment on behalf of the employee. The employer must pass the full payment on to the employee without deduction. This payment can be made irrespective of whether the employer and employee had agreed for the employee to take other forms of leave (such as sick or annual leave).
Self-employed people can also access the leave payment provided:
To see the Ministry of Social Development factsheet on the COVID-19 wage subsidy and leave payment Click Here.
For the Work and Income COVID-19 employer support webpage Click Here.
For the Ministry of Heath COVID-19 self-isolation guidelines Click Here.
For the Employer Application form for the wage subsidy and leave payment Click Here.
For the Self-Employed Application form for the wage subsidy and leave payment Click Here.
Please contact one of our employment team members if you have any questions or concerns relating to employment or the measures introduced by the Government to combat the outbreak of COVID-19.