Leave and pay entitlements during COVID-19 isolation periods

At midnight on 24 February, New Zealand moved into Phase Three of the response to community transmission of the Omicron variant of COVID-19. This means that there are currently more than 5,000 positive cases of COVID-19 community transmission being recorded each day.

With the increase in positive COVID-19 cases, the isolation requirements for close contact and household contacts have changed, with he requirements loosening, freeing up more Omicron close contacts to work. It is now only positive cases and household contacts of positive cases which must isolate for 10 days. Other close contacts are being advised to monitor for symptoms, and if they arise, get tested and stay home until they receive their results.

With transmission and contacts increasing, and the high number of people being required to isolate and therefore be absent from the workplace, issues may arise as to whether or not an employer is required to pay an employee who is isolating. We have briefly outlined the different examples below.

When able to work from home
The current recommendation is that workers who can work from home should do. However, this is not always possible, depending on the nature of the employee’s work. For example, a customer facing employee that works in retail or hospitality cannot carry out their usual role while at home. It might be possible to reallocate tasks so that the employee is able to perform some work from home (for example placing orders for stock or taking phone calls), but this may well be limited.

If an employee is ready, willing and able to work from home, then they should be paid for doing so. In this case, an employer must continue to pay the employee as per normal. This also accords with Government recommendations to employers to allow flexibility in work from home arrangements.

When unable to work from home
If an employee is unwell or tests positive for COVID-19, and is unable to work, they are entitled to take sick leave. The Holidays Act 2003 provides that after six months’ of employment, an employee is entitled to 10 days’ sick leave each year. These 10 sick days can also be used when an employee is required to care for others who are sick or who are dependents, e.g. a household member has COVID-19 and they are isolating with them and providing care.

If an employee uses all of their sick leave entitlement and are still unable to return to work, unless otherwise agreed, they will then be on unpaid leave. Alternative arrangements could include allowing the employee to use their annual leave, time in lieu or other leave entitlements, or leave in advance.

Where an employee is well but unable to work because of isolation requirements, the employee does not technically qualify for sick leave. The employer and employee should consider what options are available, such as taking annual leave or leave without pay, or the employer accessing one of the below Government assistance schemes.

In some situations, particularly where an employer has an excess annual leave balance, it may be tempting to have them access their annual leave balance. However, this can only be done where agreed by the employee, or, if required by the employer, following a genuine consultation period around the taking of leave, only if no agreement can be reached, giving the employee 14 days’ notice of the requirements to take leave. In the case of isolation requirements, the isolation period will have expired before the notice period has expired.

Close Contact Exemption Scheme
Critical businesses may obtain an exemption for workers who perform critical work. The workers must be vaccinated, asymptomatic, undertake RAT testing and meet associated rules of the scheme, including not being able to perform such work remotely. We can provide advice to assist in determining if your business, and which of your employees, qualify.

Bubble of One
There is also an exemption for workers who are household contacts, asymptomatic and vaccinated, to perform work in a ‘bubble of one’, where conditions are met, including providing them their own physical space to perform the work. We can advise on qualification for this exemption. Unlike the Close Contact exemption scheme, there does not appear to be any RAT testing requirement, however as a household contact they will have day 3 and day 10 testing requirements.

Financial support available for businesses
There are several financial support schemes available to businesses to assist with the impact of COVID-19 depending on that business’ specific circumstances.

COVID-19 Support Payment
The COVID-19 Support Payment (“CSP”) opened for applications on 28 February 2022. The CSP is a payment available to businesses which have experienced a 40% or more drop in revenue as a result of COVID-19 when compared to the revenue earned 5 January 2022 to 15 February 2022.

The CSP for a particular business will be based on the number of employees and the level of revenue.

There are a number of requirements which must be met to qualify for the CSP. Please get in touch for further details.

Short-Term Absence Payment
The Short-Term Absence Payment is available to employers to pay workers who isolate while waiting for a COVID-19 test result. To be eligible, workers need to be unable to work from home and need to miss work while waiting for their test results. The expectation is that this payment is used to pay affected employees’ wages. If the employee’s wages are less than the Short-Term Absence Payment then the difference should be used to help pay any other affected employees.

Leave Support Scheme
The Leave Support Scheme is available to employers to help pay employees who have to isolate and who can’t work from home. Again, the expectation is that this payment is passed on to workers.

Small Business Cash Flow Loan Scheme
The small business cash flow loan scheme will provide assistance of up to a maximum of $100,000 to businesses employing 50 or fewer full-time employees. If an employer has previously applied for this loan and it has been fully repaid, it may apply again. The maximum amount an employer can borrow depends on how many full time and part time employees it has. This loan is interest free if it is paid back within two years. Otherwise, it incurs a 3% interest rate for a maximum term of five years. Repayments are not required for the first two years.

In order to be eligible for this scheme, the employer must show at least a 30% drop in revenue due to Covid-19, measured over a 14-day period in the past six months compared with the same 14-day period a year ago. If revenue from the same period a year ago was also affected by COVID-19, then compare the same 14-day period two years ago.

Conclusion
The above advice is only general in nature. The legal framework If you would like specific advice on what your rights, obligations, or duties are as an employee or employer, the Holland Beckett Employment team would be happy to assist.