Last updated: 25 April 2020
On this page:
- Employee entitlements to leave and pay
- Wage Subsidy and Leave Support schemes
- Contractors and self-employed people
- Public holiday guidance
Employers and employees need to work together to slow the spread of COVID-19, protect New Zealand and keep each other safe. This means that normal obligations to keep in regular contact and to act in good faith are more important than ever. This is how employers and employees can be kind to one another.
Regular employment law applies to all employment relationships – regardless of the circumstances that we find ourselves in. This includes anything that has been agreed to in an employment agreement.
At each Alert Level, employers and employees should first discuss whether the employee can work normally, how much work is available, and how to work safely at home or at their usual place of work.
If the employee cannot work normally e.g. their normal number of hours, the employer and employee should discuss what options are available. This page outlines some of those options.
Employee entitlements to leave and pay
It can be difficult to navigate a complex and rapidly-changing situation such as with COVID-19. One of the key challenges is working out employee entitlements to leave when the worker cannot go to the workplace or work from home.
If a worker is sick with COVID-19, or required to self-isolate under Ministry of Health guidelines for COVID-19, the first consideration for an employer should be to look after people, contain COVID-19 and protect public health.
Employers should not require or knowingly allow workers to come to a workplace when they are sick with COVID-19 or required to self-isolate (as a suspected case, a close contact, or on return from overseas) under public health guidelines for COVID-19. If they do, they are likely to be in breach of their duties under the Health and Safety at Work Act.
The following table provides guidance to employers and employees about these entitlements. Below the table there is a description of how this interacts with the COVID-19 Wage Subsidy Scheme and COVID-19 Leave Support Scheme.
In all options in this table, the employer and employee should seek first to reach agreement in good faith on what approach will be taken.
|Employee is:||Leave entitlements for employee||Pay entitlements|
|Employee is working:
||Not applicable as they continue to work.||Employee should be paid, as normal, for each and every hour that they work.|
|Employee is on annual leave||Employees can use their existing entitlements.
Employees can agree to take annual leave in advance, but they cannot be compelled to do so.
|Leave paid in accordance with the Holidays Act.|
|Employee is sick, or caring for a dependent who is sick||Employees can use their existing sick leave entitlements. If paid sick leave is not available, paid special leave should be considered. An employer and employee may agree that other leave is taken.||Leave paid in accordance with the Holidays Act.|
|Employee is not at workplace, cannot work from home, and is not sick||Employer and employee should consult their employment agreement and discuss and agree options.
Special paid leave should be considered especially in the short term while you discuss what happens next. Other options that could be considered include:
If the desired set of options are not provided for in the employment agreement, it would be necessary to negotiate a variation to the employment agreement.
|Leave paid in accordance with what has been agreed, including being compliant with the Holidays Act.|
|Employee is not at workplace, not working from home, not sick, and has not agreed some form of leave with employer||If the parties cannot agree, the employer can direct the employee to take entitled annual leave with at least 14 days’ notice.||Directed annual leave is paid in accordance with the Holidays Act.|
|Employee is absent from work without agreed leave.||Employer and employee should discuss options available for what happens in this situation, but could include unpaid leave.||Employer and employee should discuss options available for what happens in this situation, but could include unpaid leave.|
* If the employer is receiving a subsidy from the Wage Subsidy Scheme or the COVID-19 Leave Support Scheme, all named employees must receive a minimum payment depending on their circumstances. See below for further details.
There are many options set out in this table and the implications of those options may vary depending on people’s individual circumstances. Parties are strongly encouraged to seek advice to ensure that the options chosen are the best options in the circumstances available
Wage Subsidy and Leave Support Schemes
Employers may be eligible for support from the:
- COVID-19 Wage Subsidy Scheme to keep employees connected to workplaces, if the employer has been adversely affected by COVID-19
- COVID-19 Leave Support Scheme, to support businesses to pay their employees who:
- can't come into work because Ministry of Health guidelines recommend they stay at home, and
- can't work from home.
Find out more including how employers can apply:
If an employer is receiving payments from the COVID-19 Wage Subsidy Scheme or the COVID-19 Leave Support Scheme, the employer must make best endeavours to pay the employee(s) named in the application at least 80% of their usual wages.
If that isn’t possible, and the employee’s usual wages are above the subsidy rate, the employer needs to pay at least the subsidy rate (ie full-time or part-time).
If the employee's usual wages are less than the subsidy, the employer must pay them at least their usual wages.
The subsidy rate is:
- $585.80 per week (gross, before tax) for people who usually work 20 hours or more per week (full-time rate), or
- $350.00 per week (gross, before tax) for people who usually work less than 20 hours per week (part-time rate).
Any surplus from the subsidy for an employee can be retained by the employer, who must use it to support wage payments within the company.
If the employee has agreed some form of paid leave with the employer, the schemes can be used to cover some or all of that cost. Employers and employees must meet all of their obligations under employment law in relation to agreement to use that leave.
If your employer has received the subsidy, but you haven’t received wages, you don’t think you’ve received the right amount, or you have questions about how the subsidy is being passed on to you, it is important that you talk to your employer in the first instance.
If you have talked to your employer and cannot resolve your problem, or think your employer has behaved fraudulently in relation to the subsidy, you can make a complaint with us.
Contractors and self-employed people
Contractor leave entitlements are not covered by this guidance. Businesses and contractors can agree to any payment arrangements they wish to. Contractors and the self-employed are eligible to apply for the COVID-19 Wage Subsidy Scheme and the COVID-19 Leave Support Scheme.
Public holiday guidance
If a public holiday falls on a day of the week that is otherwise an employee’s working day, the employee should be paid for the public holiday. The payment should be Relevant Daily Pay, or if it meets the criteria, can be Average Daily Pay.
Determining whether a day is an 'otherwise working day' should be based on the employee's pre-lockdown working pattern. However, if the employer and employee have agreed to a permanent change, this new arrangement can be used to assess whether the day is an 'otherwise working day'.
Employers can use the Wage Subsidy to cover some or all of their employees’ wages, including pay for the upcoming public holidays.
Employers must pass the full subsidy amount received onto the employee, except where a person’s income is normally less than the subsidy amount, in which case they can be paid their normal salary.