Last updated: 22 September 2020
Support is available for employers to pay their employees in situations where employees need to stay away from work and cannot work from home. Employers can apply for support to pay employees. The self-employed or contractors can apply directly.
Employment law rights and obligations still apply 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 or in potential restructuring or redundancy situations
- complying with all minimum standards legislation and with the Employment Relations Act 2000.
The COVID-19 Leave Support Scheme is administered by the Ministry of Social Development. Information on who is eligible, and how to apply for the scheme is available on the Work and Income website.
Payment details and obligations
The first and primary obligation, to pay employees as required by their employment agreement and employment legislation, remains. The scheme requirements do not remove or reduce these requirements in any way.
If an employer is receiving payments from 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 normal wages or salary.
If that isn’t possible, and the employee’s normal wages are above the subsidy rate, the employer must pay at least the relevant subsidy rate (ie the full-time or part-time rate).
If the employee's normal wages are less than the subsidy, the employer must pay them at least their normal wages. Any excess subsidy from the leave payments provided must be used for wages or salaries for other workers in the business where possible.
The subsidy rate is:
- $585.80 per week (gross, before tax) for each full-time worker (where they usually work 20 or more hours a week), or
- $350.00 per week (gross, before tax) for each part-time worker (where they usually work fewer than 20 hours a week).
From 28 September, the COVID-19 Leave Support Scheme will cover a two-week time period, with the option for organisations to re-apply for those same workers, as many times as necessary. Employers can also make further applications for additional workers who are eligible at any time, while the scheme remains open.
The payments are used to fund employers paying wages and salaries and are subject to normal tax payments such as deductions for PAYE, Student Loan, KiwiSaver, ACC levies or Child Support.
More information on who is eligible, and how to apply for the scheme is available on the Work and Income website.
Detailed criteria for those at ‘higher risk’
If a worker, or one of their household members, are at a higher risk from COVID-19, they should take extra precautions when at work or other situations where there may be a risk of COVID-19.
Workers who are in a higher risk group, or have a household member in a higher risk group, should discuss with their employer whether it is possible for them to work in a way that appropriately manages the risk.
During this discussion, it is important that employers consider their duty of good faith towards their employees, obligations under the Human Rights Act about not discriminating against people with a health condition, and their obligation to keep workers safe.
If the worker and employer agree that it is not possible for them to safely continue working, both parties should agree what their leave arrangements will be and the employer should apply for the support on the worker’s behalf.
In their application for the COVID-19 Leave Support Scheme, an employer will be required to sign a declaration outlining that they have discussed the application with their employee and the employee consents to the information being provided to support the application.
Using other leave entitlements
Employers cannot unlawfully make employees take any existing paid leave entitlements such as sick leave or annual holidays while receiving the COVID-19 Leave Support scheme.
However, if an employee is sick, their employer must pay them their sick leave entitlements, if available. If an employee takes annual holidays, they must be paid their normal wage rate, for their normal hours of work unless the employment agreement has been varied.
Worker believes they’re eligible but the employer has not applied
If employees believe that they are eligible but the employer hasn’t applied, employees should discuss this with their employer and encourage the employer to apply for the COVID-19 Leave Support scheme.
The scheme relies on employers and employees working together to slow the spread of COVID-19 and protect people who are at higher risk from the disease, which includes addressing issues that arise in the workplace. Employers have a good faith duty to be communicative and responsive, especially during these difficult times.
For guidance on working together in good faith and employee leave entitlements, see:
Where a dispute arises, you can have access to the usual process for resolving employment relationship issues.
An employer is receiving the subsidy, but the employee thinks they’re not meeting their obligations
If employees think that the employer has acted unlawfully, they can make a complaint with us.