The August Wage Subsidy Scheme opened last Friday 20th August following a nationwide Alert Level 4 lockdown from 11:59PM on Tuesday 17th August. If you’re an employer, sole trader, or an employee of a business, you might not be sure of what this means for you or what you’re eligible for. We’ve broken down the ‘need-to-knows’ for you below.
Employers and sole traders:
Applications & Eligibility:
Online applications are now open online through the Ministry of Social Development (MSD) website and are available to any business or sole trader in New Zealand that meet the criteria. As an employer or self-employed person, you can apply for the subsidy to help contribute to the payment of wages to your employees for a two-week period. To qualify, your business must experience or expect to experience at least a 40% decline in revenue because of the move to Alert Level 4, as well as any additional eligibility criteria that was applicable last year.
How much can I get?
The August Wage Subsidy rates have increased from last year to be in line with wage cost increases. $600 a week is available for each full-time equivalent worker (the employee works 20 or more hours a week) and $359 is available for each part-time worker (the employee works less than 20 hours a week). MSD have asked for applications to be as accurate as possible to avoid any delay in processing your application quickly.
What if my employees have been told to self-isolate AND they can’t work from home?
There are two other payment schemes you can look into as an employer with employees that are unable to work due to Ministry of Health orders. The COVID-19 Leave Support Scheme is available to help businesses pay employees who have been instructed to self-isolate and are unable to work from home. There is also the COVID-19 Short-Term Absence payment which is available for employees who must stay home while waiting for a COVID-19 test result to be returned and are unable to work from home. Employers can only receive one of these three COVID-19 payments from MSD for the concerned employee for the same period.
Is there anything that covers my business expenses?
Yes! Additionally, from Tuesday 24th August, businesses can apply through the IRD website for a Resurgence Support Payment to help with business expenses such as rent and fixed costs. A business can apply for both the Wage Subsidy and Resurgence Support Payment. To be eligible for this payment your business must have experience or expect to experience a 30% decrease in revenue because of the change in Alert Levels due to COVID-19. Eligible businesses will be paid the lesser of:
$1500 plus $400 per full-time equivalent (FTE) employee, up to a maximum of 50 FTES, or
Four times the actual revenue decline expected by the applicant
If you can work from home during the lockdown, your employer must, to the best of their efforts pay you at the same rates as outlined in your employment agreement. If they are unable to do so, they can apply for the Wage Subsidy to help meet their pay obligations.
If your employer has received the Wage Subsidy, they must try their hardest to pay their employees at least 80% of each employee's usual pay rate. If your employer is unable to continue paying you at 100% of your normal pay rate during the subsidy period, then your hours should be adjusted accordingly. Your employer must pay you the full amount of the subsidy they've received for you unless your usual income is less than the subsidy amount they have received. In this case, you will be paid your normal amount and any left-over subsidy will go towards helping your employer pay other staff.
I’m a casual employee – do I still get paid?
If you are employed as a casual employee, the nature of your employment contract means you aren't entitled to ongoing work, so there is no certainty that you will be continued to be employed. However, your employer can still apply for the wage subsidy and pay you accordingly if they meet the criteria. This is arguably something an employer should do as an act of good faith towards their casual staff members as the subsidy is free to apply for.
Do I have to take annual leave?
It is important to note that your employer cannot make you take any annual leaving owing to you. This is directly in breach of the purpose of the Holidays Act 2004 which states the purpose of annual leave is to allow an employee time for rest and recreation. All other legal rights you have as an employee remain the same – your employer must still act in good faith and be fair and reasonable in any situation. You can search to see if your employer is a wage subsidy recipient, as well as the amount paid and the type of COVID-19 payment they've been paid, through the MSD website to ensure your employment rights are being followed lawfully.
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