COVID-19 Government Wage Subsidy

Wage Subsidy Issues Many of you will have applied for and received the Government wage subsidy for your employees. The application process included each applicant agreeing to a formal legal declaration which set out the rules in relation to the subsidy. Wage Subsidy Extension The Government has announced there will be a Wage Subsidy Extension payment available to support employers, including sole traders, who are still significantly impacted by COVID-19. You cannot apply for the wage subsidy extension for an employee, until their 12-week wage subsidy has finished. The wage subsidy extension will be available from 10th June 2020 until 1st September 2020 so employers can keep paying their employees.

Important things to know:

• To qualify for this extension you must have had a There are two declarations in play, and the one that revenue loss of at least 40% for a continuous 30 day is applicable to you will depend on whether you applied period. This period needs to be in the 40 days before for the subsidy before 4pm on Friday 27 March 2020 you apply (but no earlier than the 10th May 2020) and or after that date/time. must be compared to the closest period last year Both declarations have onerous requirements that • It will cover eight weeks per employee from the date essentially put in place an additional set of employment you submit your application rules and requirements which apply for the 12-week • It will be paid to you as a lump sum at the same weekly period of the subsidy. The second declaration, applying rate as the wage subsidy after 4pm on 27 March, is even more onerous than the first declaration. It is important that you adhere • You will need to agree to certain obligations, such as to: –pass the subsidy on to your employees –retain your employees for the duration of the subsidy to the applicable declaration, –do your best to pay your employees at least 80% as well as the usual employment of their normal pay law rules and requirements. –take active steps to mitigate the impact of COVID-19 on your business – this might include Because everyone who applied for the subsidy will still be in talking with your bank, making an insurance claim, the 12-week subsidy period, it is therefore important that for or activating your business continuity plan. any employment matters you are dealing with, you ensure you adhere to both the applicable declaration, as well as the usual employment law rules and requirements. Additional information, including copies of the two applicable declarations are available in the Covid-19/wage subsidy section of the Work and Navigating through employment issues has been Income website www.workandincome.govt.nz challenging and will continue to be challenging for at least the 12-week subsidy period, and potentially beyond given that these times are unprecedented from a number of perspectives, including from an employment law perspective. Danny Jacobson and Trudy Marshall are Partners at Employment Lawyers Tauranga and they specialise exclusively in employment law. They operate our Employment Helpline for NZCB members: phone 07 928 0529 for 10 minutes free advice on any employment related issues. (The above is by its nature general, and is not intended to be a substitute for legal advice.)