COVID-19 – Key Questions on COVID-19 for Employers

Since the announcement of the Government’s COVID-19 Wage and Leave Subsidies we have received a number of questions about how they are to be applied.  Advice on specific queries may be required but we address these general pātai below.

Am I eligible for the wage/leave subsidies?

If you are a New Zealand business with an actual or predicted revenue loss of 30% month on month, you are likely to be eligible.  Check the Work and Income website (at https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html) or contact us to work through the details.

Can employers make employees use their annual leave entitlements to cover the period of leave imposed by the lockdown?

Only where this is done in accordance with the Holidays Act and any relevant employment agreement provisions.  Essentially 14 days’ notice of the requirement to take leave needs to be given.

But employers should always be working with employees as best as possible to agree on annual leave being taken.  If there is agreement between the employer and employee, then leave can essentially be taken at any time.  In these circumstances, we see that employers that have strong communication and trust with their workers are often able to find ways to make the best of a bad situation that help employees keep their jobs and help employers stay in business.

With all this talk of reducing employees to 80% of their work/wages, can employers just do that automatically?

No.  Employers still need to act in good faith and follow proper process to make changes to any employment arrangements.  In practice, the effects of COVID-19 will mean that the discussions around changes are often more readily understood by employees and therefore, it may be easier to engage on any proposed changes and reach agreed outcomes.

Any agreed changes to hours or wages, or agreements to use leave in advance, should all be clearly recorded in writing for the benefit of both parties. 

How many different ways are there to structure an employee’s work/leave/subsidy arrangements?

Heaps!  Where employers and employees are working together to proactively find solutions, any arrangement is possible - just as long as it does not take away from minimum legal entitlements.  Some employees may agree to use all their annual leave in one go during the lockdown.  Some may drop to 80%, take a day off and use one day of annual leave per week and have the balance of their pay come primarily from the wage subsidy which the employer is receiving.  In dire circumstances, some employees may even take unpaid leave for an extended period of time just to ensure they have a job in two or three months’ time.

What is the deal with Easter and ANZAC holidays during a lockdown?

Again, the Holidays Act still applies and reflects minimum entitlements.  Employers need to pay their employees in accordance with the Act and any relevant employment agreement provisions.  If an employee would normally work on a holiday and does not, then they are entitled to be paid as they would normally be for that day.  If an employee works on a holiday then they will be entitled to time and a half, and possibly a day in lieu.

We appreciate that there will be a myriad of different scenarios out there and each one needs to be assessed against the above starting point.  COVID-19 does not change any minimum entitlements for employees.  Any employer who does not comply with the law in this regard, or looks to be overly ‘clever’, may face issues down the track. 

Be kind to one another and act in good faith.  He waka eke noa.

If you need assistance on any of the employment issues related to COVID-19, please contact Renika Siciliano or Jerome Burgess.

Renika is a Director and leads our Workplace Law Team. She can be contacted on 07 958 7429.

Jerome is an Associate in our Workplace Law Team and can be contacted on 07 958 7427.