The government has unveiled a $12.1 billion support package for the New Zealand economy. A significant aspect of this proposal is the provision of wage and sick leave subsidies for businesses struggling with the economic fall out from the Covid-19 virus.
To support businesses who are impacted by Covid-19 and face having to make staff redundant or reduce their hours, the Government has announced a Covid-19 Wage Subsidy package. The Wage Subsidy is available to all employers, contractors, sole traders or self-employed workers who meet the required qualification. To qualify:
- The business must have suffered, or is projected to suffer, a 30% decline in revenue compared to any months between January and June the year prior and this must be due to Covid-19;
- the business must have taken active steps to mitigate the impact of Covid-19, for example, engaging with their banks or financial advisor.
- You must make best efforts to retain employees who are subject to the subsidy and pay them a minimum of 80% of their normal income for the subsidised period.
For eligible businesses, the Wage Subsidy will be paid at a flat rate of $585.80 per week available for all full-time workers (20 hours per week or more) or $350 per week for part-time workers for a 12 week period and is paid in one lump sum per worker up to a maximum sum of $150,000 per business.
To incentivise self-isolation and support those who are required to self-isolate or are infected by Covid-19 and unable to work, the Government has announced a Covid-19 Leave Payment.
The COVID-19 Leave Payment will be available for 8 weeks from 17 March 2020. Employers will be able to apply for this more than once. After the first 8 weeks, the Government will reassess and either amend or extend the package.
Under the Leave Payments package, employers, contractors, sole-traders and the self-employed are entitled to claim for Leave Payments. They are entitled to claim Leave Payments if the affected worker:
- needs to self-isolate and cannot work;
- cannot work because they are sick with Covid-19; or
- cannot work because they are caring for dependents who are required to self-isolate for who are sick with Covid-19.
The Leave Payment is paid at a flat rate of $585.80 per full time employee, or $350.00 per part time employee and it appears is available after the employee has used up their sick leave entitlement.
Employers receiving the payment for employees who are required to self-isolate can receive it for 14 days. It can be paid for the entire period an employee is sick (or looking after a dependent person who is sick) with COVID-19 but the employer must apply every 14 days.
You and your employee can agree to use any form of paid leave (e.g. annual leave) to cover their period of self-isolation. However, employees aren’t required to have used any or all their paid leave entitlements before they can receive this payment.
Self-employed people are eligible for the payment if they are usually earning the minimum wage when they decide to self-isolate and cannot draw an income for the period of self-isolation.
Applying for wage and leave subsidies
To apply for the wage subsidy scheme, employers will be required to complete a declaration form on the Work & Income New Zealand website declaring that they have met the criteria. Any false declaration will be treated as fraud.
Applying for either the wage or leave subsidy is done by completing either of the following forms:
Application form for Employers:
Application form for Self Employed/Contractors:
If you have any questions about the information contained in this article, please get in touch with us and our employment law specialists will be happy to assist.
For more information see the following link on the Work and Income website:
If you are concerned about the impact that COVID-19 coronavirus may have on your workplace, please don't hesitate to get in contact with our employment team.