Working through COVID-19? What you need to know

As indicated by the countless and inescapable articles and news stories, the COVID-19 pandemic has thrown us all into an unprecedented time which has not only put our health at risk but that also poses a risk for New Zealanders’ employment.

As of 11.59pm on Wednesday 25 March 2020, New Zealand was raised to Alert 4 status which means we are essentially in a nationwide lockdown.  All businesses, other than essential services, are closed.

But rest assured, it is not all doom and gloom; the Government has made it clear that their aim is to keep as many New Zealanders as possible in employment throughout this time. To achieve this goal, the Government has established a wage payment scheme. This scheme does not affect any of an employee’s existing rights or entitlements under current New Zealand Law.

Employees and employers must deal with each other in good faith. This principle, and the requirements that it imposes, should underlie all decisions and communications within the employment relationship. This means that even though New Zealand is on lockdown, an employer cannot simply reduce an employee’s hours or insist that an employee take annual leave without mutual agreement.

If an employer does insist that an employee is to take annual leave they must give 14 days’ notice before that leave is to be taken. However, the Government’s new scheme provides financial relief for struggling employers to prevent this occurring.

Businesses that are significantly impacted by COVID-19 can, and should, apply for the Government’s wage subsidy. Employers are eligible to receive a lump sum payment for each employee that covers a period of 12 weeks. This applies to both businesses that have workers who are continuing to work from home and businesses that have had to close down activity completely.  The wage subsidy provides $585.80 per week for every full-time employee and $350.00 per week for part-time employees. There is an expectation that employers who receive the wage subsidy from the Government will continue to pay at least 80% of their employees’ wages.  If the employer cannot afford to pay this, they must pass the full subsidy on to their employees.

The wage subsidy scheme is also available to sole-traders and workers who are self-employed. The only difference is that these workers will have to apply to the Ministry of Social Development themselves rather than having an employer apply on their behalf.

The subsidy is intended to keep people employed in their current job. From 4pm on Friday 27 March 2020, the Government is requiring that employers keep their employees in employment for the period of the subsidy.  Nonetheless, if you find yourself as an employer or employee facing the redundancy process following this period, please keep in mind that there are very important procedural steps that must be followed.

If you have any questions about COVID-19 and where it leaves you in terms of your employment please do not hesitate to get in contact with us.

By Lauren Davis