Leave and pay entitlements during COVID-19 response and recovery

Your rights and responsibilities regarding pay and leave during COVID-19 response and recovery.

Last updated: 19 August 2020

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Employers and employees need to work together to protect New Zealand and keep each other safe during the global COVID-19 pandemic. This means that normal obligations to keep in regular contact and to act in good faith are more important than ever.

Regular employment law still applies to all employment relationships – regardless of the circumstances that we find ourselves in. This includes:

  • having a written employment agreement for every employee, and doing what that agreement requires 
  • keeping each written employment agreement up to date, including documenting any changes that affect rates of pay or hours worked 
  • meeting legislative and any relevant contractual requirements for changing employment arrangements    
  • complying with all minimum standards legislation and with the Employment Relations Act 2000. 

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 (eg 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. 

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:
  • At home
  • At the workplace
Not applicable as they continue to work. Employee should be paid, as normal, for each and every hour that they work.  This must be at least the applicable minimum wage.
Employee is on annual holidays Employees can use their existing entitlements.

Employees can agree to take annual holidays 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: 
  • annual holidays
  • leave without pay*
  • long-service leave (if relevant)
  • alternative holidays (if relevant)
  • other payments (even partial payments) by the employer for a certain period of time
  • any combination of the above.

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. If a variation is not agreed, then the existing agreement must be followed.

Note: if an employer considers broader variations are needed to hours or other aspects of the agreement, the employer should read the restructuring guidance.

Leave paid in accordance with what has been agreed, including being compliant with the Holidays Act and the applicable minimum wage.
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 holidays with at least 14 days’ notice. Directed annual holidays are 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 wage subsidy or Leave Support Scheme payment, 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.

Employment law and wage subsidies

Contractors and self-employed people

Contractor arrangements are not covered by this guidance. Businesses and contractors can agree to any payment arrangements they wish to.  

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'. 

Otherwise working day

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