Employers, Employees, and COVID-19

What employers and employees need to know about the recent updates to the Wage Subsidy in relation to COVID-19.
Employers, Employees, and COVID-19

What employers and employees need to know about the recent updates to the Wage Subsidy in relation to COVID-19.

Firstly, most will be aware by now that employers, self-employed, contractors, charities, incorporated societies, non-government organisation and post-settlement governance entities are
eligible to apply for the subsidy.

There has been a lot of confusion around the employer’s obligations in this unprecedented time. The government has amended and clarified parts of the wage subsidy. The amendment has immediate effect.

Here’s what you need to know:

  1. Employers who applied for the wage subsidy after 4:00pm on 27 March 2020 must undertake to keep employees, who they receive a wage subsidy for, employed for the duration of the subsidy. This is a new requirement and means that redundancies are not an option.
  2. Employers must use ‘best endeavours’ to continue to pay their employees at least 80% of their regular income for the period of the subsidy
  3. The payment of 80% is not mandatory, but if the employer is not able to do so, they must still pass on the entire wage subsidy to the employee and keep them employed.
  4. The sick leave scheme which was being offered alongside the wage subsidy has been combined into one subsidy schemed to prevent employers double-dipping.
  5. The provisions of the Employment Relations Act still apply and the principals of good faith apply to both employers and employees.

If you are looking at ways of reducing your costs and ongoing expenses, and you are receiving the wage subsidy for your employees, it's vital that you get advice before taking any action.

If you have any questions, we would be more than happy to help – contact Georgia Watts on georgia@gallie.co.nz

By
Georgia Watts
Solicitor

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