Employer’s obligations during alert level 4
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 that may be of assistance.
We will be in a position to provide you further advice over the coming days as more information comes to hand.
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.
|Sectors||Entities providing essential services (including their supply chains)|
|Accommodation||Accommodation services for essential workers and people who need to be isolated/quarantined|
|Border||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)|
|Education||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)|
|Financial services||Banks, insurers and other financial institutions|
|Local and national government||
|Primary industries, including food and beverage production and processing||
|Public safety and national security||
|Science||Any entity (including research organisations) involved in COVID-19 response, hazard monitoring, resilience, diagnostics for essential services|
|Social 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|
For the most up to date list of essential services visit: https://covid19.govt.nz/government-actions/covid-19-alert-level/
Employees who are working in essential services during this period should be paid as per usual.
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 we recognise 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.
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 (eg. that are less than a year old) and high growth firms (eg. 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 (eg. 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.
Redundancies and restructurings
We understand that some businesses have already commenced work to restructure their business. In light of today’s announcement employers may wish to:
- Put the restructure on hold;
- Continue with the restructure; or
- Amend depending on your businesses circumstances.
We are able to advise on your options for restructuring your business in this every changing environment.
Workplace Law Team
Employment: Andrew Shaw, Fiona McMillan, Gwen Drewitt, Maria Green, Hannah Martin, Joseph Harrop, Holly Struckman, Alex Beal, Giuliana Petronelli, Ana Fruean, Elise Wilson, Abby Shieh
Immigration: Mark Williams, Rachael Mason, Daniel Kruger, Nicky Robertson, Hetish Lochan, Julia Strickett, Rita Worner, Ken Huang, Mary Zhou, Mahafrin Variava, Josh Templeton, Sally Stone, Shi Sheng Cai (Shoosh), Sarah Kirkwood, Janeske Schutte, Sati Ravichandiren, Lingbo Yu, Mengying Wang
ACC: Andrew Shaw
Health and Safety: Andrew Shaw, Fiona McMillan
Partner, Lane Neave
t +64 3 353 8014
m +64 29 244 9001
Partner, Lane Neave
t +64 9 300 6264
m +64 27 351 2000
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