Employer’s obligations during alert level 4
This special edition of HRNZ News, outlines employer’s obligations during alert level 4. HRNZ will continue to provide members with helpful advice and tips as things evolve.
While we are still awaiting further specifics on what Alert Level Three and Four will actually look like for New Zealand, below is some guidance, written by Lane Neave, that may be of assistance. Please also refer to the following information sheet from Work and Income New Zealand.
The Government has stated that the following are considered ‘essential businesses’ (noting that this is an evolving list) and will remain open during Alert Level Four.
Entities providing essential services (including their supply chains)
Accommodation services for essential workers and people who need to be isolated/quarantined
Customs New Zealand, Immigration New Zealand and the Ministry for Primary Industries
Building and construction
Building and construction related to essential services, critical infrastructure, or immediately needed to maintain human health and safety at home/work
Courts, Tribunals and the justice system
Courts of New Zealand and Tribunals and Critical Crown entities (eg Electoral Commission)
At level 3 only: Schools and educational facilities (e.g. ECE centres)
Fast-moving consumer goods
Businesses involved in the supply, delivery, distribution and sale of food, beverage and other key consumer goods (but not takeaway shops)
Banks, insurers and other financial institutions
Local and national government
Primary industries, including food and beverage production and processing
Public safety and national security
Any entity (including research organisations) involved in COVID-19 response, hazard monitoring, resilience, diagnostics for essential services
Welfare and social services, including NGOs, which meet immediate needs (further guidance will be provided)
Transport and logistics
Utilities and communications, including supply chains
Electricity, gas, water, waste, fuel, telecommunication services, internet providers and media
While in lockdown do I need to pay my employees?
If your employees can work from home, and your business remain physically closed, then they should be paid their usual salary/wages.
If your employees cannot work from home, and your business remains physically closed, then there is no legal requirement to pay your employees, as they are ‘ready and willing’ to work, but they are not ‘able’ to work.
In an ideal world, and at the employer’s discretion, employees should be on paid special leave for the duration of Alert Level 4; however it is recognised that this may not be possible for most employers.
Ultimately, any pay will need to be by way of consultation and agreement between the employer and the employee. You may wish to consider one or a combination of the following options:
- Paid special leave
- Sick leave (understanding the employee is not ‘sick’)
- Annual leave
- Alternative leave
- Unpaid leave
- Wage subsidy scheme.
Wage Subsidy Scheme
The Government has now introduced the following changes to the wage subsidy scheme:
- The previous $150,000 cap is being lifted, so that all employers can access the full payments to subsidise each of their employees’ salaries
- New businesses (e.g. that are less than a year old) and high growth firms (e.g. firms that have had significant increase in revenue) are also eligible. They need to demonstrate the revenue loss assessment against a similar time period, for example a 30% loss of income, attributable to COVID-19, in March 2020 compared to January 2020
- Self-employed people with variable monthly incomes are eligible if they can demonstrate the revenue loss assessment against the previous year’s monthly average (e.g. 30% loss of income attributable to COVID-19 comparing March 2020 to the average monthly income in the period March 2019 to March 2020)
The scheme does cover registered charities, non-governmental organisations, incorporated societies and post-settlement governance entities.
The same criteria will apply (including the 30% revenue reduction for businesses and the businesses must make their “best endeavours” to pay their employees 80% of their pre-COVID-19 income). The subsidy will still run for 12 weeks.