Covid-19 – Changes re Subsidies

Posted 30 March 2020 by Mike Johnson covid-19, changes, payroll;

Monday 30 March 2020 

Some very important changes – please check this out as it applies to you

Wage Subsidy and Leave Payments combined

Treatment of excess subsidy where normal pay is lower

Stat Holidays

Update on letter for essential workers

 Essential HR here to help – and now safely at our homes. For ongoing help, you can contact Mike on 027 2808546 or mike@essentialhr.co.nz or Beccy on beccy@essentialhr.co.nz or 027 2909070 – but if you phone our landline 03 6590377 you can leave a message that gets delivered to us automatically.  Please bear with us if you can’t get straight through – we are getting many calls!  I’m happy for you to pass this on to others.

If you need to conference call, we are all set up with Zoom.

Wage Subsidy and Leave Payments Combined

Non-Essential businesses – if you have someone who would previously have been entitled to the leave support payment (because they are self-isolated) this support is now covered by the wage subsidy scheme – there is only one application form and process – the others stopped on Friday evening.

Essential Services – The change in system above has created a difficulty for Essential Services with people who are off sick with the virus or needing to be isolated.  The government are working on a system for you. 

Application Declaration – There have been some changes to the criteria you now have to sign off against when applying for the subsidy – a good idea to check out in advance what you will have to sign up to when applying:  https://www.workandincome.govt.nz/online-services/covid-19/declaration-wage-subsidy.html

Please read the section on your obligations to use the subsidy to retain and pay employees.  To help avoid confusion, the second bullet needs to be interpreted alongside the 7th bullet – you are not making any changes to your obligations under your employment agreement when using best endeavours to pay up to 80% of your obligations.  Some employers have formally negotiated changes, and these should be signed and documented, especially including any temporary nature appropriately.

You should also be aware of the approvals you should have from your staff re information sharing – note this agreement need not be in writing if impractical to do so.  If you need help with a process for this, please contact us.

 

Treatment of Excess Subsidy where normal pay is lower than the subsidy

• We now have this guidance on the WINZ site and confirmed by Grant Robertson (my thanks to Nicole Elvy of Equation (a friend who is a tireless Xero consultant and payroll advisor) for directing me to this)
  • The wage subsidy is designed to keep your employees connected to you. Any difference should be used for the wages of other affected staff.  So you pay people what they would normally receive and the excess subsidy should be used to top up other staff.

 

Stat Holidays

• The legal obligations around pay for stat days has not changed
• However, I do foresee questions around whether the Easter Stat days for those closed down are actually days that would otherwise have been worked, but for it being a stat day.  Also there may be differences of opinion on what is “relevant daily pay”.
• I will take legal advice, but for those already planning this, my view is:
  • Staff should get paid for the stat days
  • Relevant Daily Pay is what they would expect to get paid for the day had it been a working one
  • While you are shut down and the person is at home, they should get paid as for any other day in the week, but if they are working from home they should not be required to work.  That means they get paid the subsidy, topped up however you are doing it – technically if you are topping up using their leave, then for stat days, the top up should be the Employer’s cost
  • If anyone is required to work from home on a stat day they should be paid time and a half for hours worked and entitled to a full Alternate day in lieu.

 

Letter for those out and about in Essential Services

• Police are asking that all employees of essential workers create a document for staff to carry with them (see my “payroll and 80% best efforts” update). That document should:
  • Be on company letterhead.
  • Contain the full name and date of birth for the employee who is considered an essential worker
  • Have a phone number for a Supervisor/Manager for Police to contact if needed.