Wage Subsidy Extension
On 11 May 2020, the New Zealand Government announced that the country would be moving to Alert Level 2 and on 14 May 2020, Finance Minister Grant Robertson announced additional funding of up to $3.2 billion for a targeted extension of the Wage Subsidy Scheme.
Wage Subsidy extension
The Wage Subsidy extension provides for a further 8 weeks of payments after the existing scheme ends on 9 June. Applications for the extension are open for a 12-week period from 10 June until 1 September. The extension will provide an 8-week payment per named employee and the weekly rates will be the same as under the previous scheme. It will be paid to the employer as a lump sum.
Employers cannot apply for the Wage Subsidy extension for an employee until their 12-week wage subsidy under the previous scheme has finished. The 12-week period begins from the day the employer applied for the previous wage subsidy, rather than when the payment of the subsidy was made to that employer. In addition, employers must have had, or expect to have, a revenue loss of at least 50% for the 30 days immediately prior to applying, compared to revenue for the same period in the previous year (there are different calculations for organisations where this is not possible, such as new businesses or pre-revenue firms). The employer will also need to agree to certain obligations, such as to:
- Pass the subsidy on to employees;
- Retain employees for the duration of the subsidy;
- Use best endeavours to pay employees 80% of their normal pay; and
- Take active steps to mitigate the impact of COVID-19 on their business which may include talking with the bank, making an insurance claim, or activating a business continuity plan.
For many, Level 2 means returning to the workplace. While most businesses can open, they should only do so if they can operate safely. For employers, this requires implementing restrictions and guidelines in the workplace to do everything reasonably possible to reduce the risk of COVID-19 transmission at work. To achieve this, employers should consider:
- Implementing alternative ways of working;
- Talking with employees to identify risks and how to manage them;
- Asking all employees who have cold or flu-like symptoms to stay away from the premises; and
- Social distancing of at least a meter where possible.
It is also important for all workplaces to keep records of who has attended the premises each day for the purposes of effective contact tracing. While methods used to reduce the risk of COVID-19 transmission will vary between businesses and sectors, all employers must ensure their workplace complies with health and safety requirements if they wish to open and remain that way.