7 Apr 2020

Wage subsidy: Your Covid-19 questions answered

11:33 am on 7 April 2020

As Covid-19 spreads around the world, it can be daunting keeping up with the information. For RNZ, our responsibility is to give you verified, up to the minute, trustworthy information to help you make decisions about your lives and your health. We'll also be asking questions of officials and decision makers about how they're responding to the virus. Our aim is to keep you informed.

Your questions about the Covid-19 wage subsidy and employment issues have continued to flood in, so on Monday we answered a lot more.

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Photo: 123RF

We put them to Quigg Partners employment law expert Simon Martin and independent employment specialist Ashleigh Fechney.

If you want to read the answers to the first batch of questions, click here.

Here's a summary from round 2:

My employer is refusing to say whether they have applied for or received the subsidy. How do I find out?

The companies which have received the subsidy will be named. The government indicated this will happen from 6 April.

My employer doesn't want to apply for the subsidy, what can we do?

Engage with the employer to start; if that doesn't work seek legal advice and a letter could be drafted for you. Lastly you have six years to raise a claim for lost wages.

Can my business decide to apply for the subsidy for some employees but not others?

Yes but in the circumstances there may be legitimate questions from employees about why they are not included in the application. If employers are genuinely concerned they may not be able to keep everyone then they should seek legal advice. The employer will have a difficult time trying to justify redundancy during the 12-week period if the employee agrees to receiving the wage subsidy. It also raises the question of pre-determination if some employees get the subsidy and others don't.

If an essential worker is 24 weeks pregnant, can they get the wage subsidy or do they have to take maternity leave?

If she is considered vulnerable her employer should be applying for the subsidy for essential workers which the government has announced. She could be paid that until she begins maternity leave.

If you are employed by an essential service and you are concerned they are not providing sufficient safety precautions, can you be forced to work? If you refuse, what are your options pay wise?

Before you do anything you need to raise your concerns with your employer regarding any safety precautions and provide them with the chance to address those. They must be reasonable. If you think there is an imminent risk to your health you can refuse to work but the legal threshold is very high. If reasonable safety precautions have been put in place along the lines suggested by the government and you refuse to work you are at risk of not being entitled to be paid.

Some of our staff earn more than the subsidy and some less. I am wondering if it is OK to top up the wages of staff that earn more than their subsidy allocation from the balance of the staff earning less? Or if the balance will need to be paid back at a later date?

If the employee earns less than the subsidy then the remainder can be used to top up other employees.

My employer has received the subsidy and is planning to pool the full amount received for each employee, so everyone will receive 80% of their regular wage. He is not contributing himself. This will exhaust the subsidy after 7 weeks. This will also mean higher paid employees will receive more than the amount they are owed from the subsidy and lesser paid employees less. Is this legal?

If you are granted the wage subsidy it must be apportioned over a 12-week period. It requires the employees to be kept in employment for 12 weeks.

I have several staff and have applied for a wage subsidy. I'm wondering is it possible to not pay myself my wage subsidy and use that money to top up some of my employees? I am happy to go without income to keep my business alive.

If you are happy to do it then it should be fine.

I have type 1 Diabetes which puts me at higher risk. I contacted my GP who said I should in no way return to work. I have started the process with the government support scheme. What are my options and rights moving forward with my employer?

If you have been signed off unfit for work by your doctor then your employer will need to operate on that basis. This is what the wage subsidy is for - to assist your employer as well to keep you paid throughout the 12-week period. You can also attempt to see if there are things you can do at home for your employer. If you are an essential employee there is the scheme which the government fleshing out more on Monday.

If someone had annual leave booked (eg for school holidays) and now wants to cancel it, can the employer say no and insist they still take it?

Yes your employer can refuse to take away the annual leave but they are required to act fairly and reasonably. In these circumstances if the employer is receiving the wage subsidy it would arguably be unfair to revoke the leave.

Will part-time workers who earn less (gross) than the $350 level get 100% or only 80%?

The part-time worker will get their regular weekly pay. They won't get above it. The employer is not required to pass on the full subsidy if they earn less.

I'm wanting to know if I accumulated and booked leave while on my full-time rate but my hours have since been reduced, does my employer have to pay me according to what I was earning when I booked the leave or the reduced rate?

The employer must pay you your relevant weekly rate or the average, which ever is higher.

Do employees accrue annual leave on wages received during the lockdown period, if they are not working, but are being paid at 80% of their usual wages?

Yes. If you remain employed you will continue to accrue your entitlements as laid out in the Holidays Act.

Can an employee be included in the wage subsidy scheme, be paid for at least the minimum during this time (as agreed with the employee to help him/her out) but get made redundant after the 12 week period is over?

You can get made redundant after the 12-week period. The government said the subsidy won't stop redundancies but it is there to cushion the blow.

My workplace has received the wage subsidy but hasn't paid it on to us yet. Instead they're asking us to choose between taking unpaid leave and guarantee our jobs at the end of the lockdown, or take the subsidy and maybe be liable to be made redundant. They're also paying us an average of the hours we've worked over the last pay period, instead of the hours worked. Is this legal?

Any requirement to choose between taking a period of leave and receiving the wage subsidy is unlawful. The Finance Minister has made this clear and it's in the declaration the employer has to sign. In terms of payment it is your ordinary pay if you had been working but many employers and employees will be agreeing on reduced payment in the circumstances.

How much do we need to pay our casual staff who normally do 2-10 hours per week? Do we need to pay them the whole $350 or their usual pay? And do we need to pay tax as well?

Casual employees should be paid their average earnings over the past 12 months; you don't need to pass on the whole $350 if they earn less and you need to pay tax.

What is the situation for a worker from India who has returned there and the business changed hands during this time? The company is not eligible for the subsidy. What entitlements are there for him as he is unable to return to his job?

Because he's not willing and able to work, a definition in the law, he would be excluded. Because the employer is not eligible for the subsidy there wouldn't be a requirement to pay him under the law. However, if the employee was in India for work then it would be a different conversation.

My mum's average pay a week at a shoe store is around $500. She has been told, despite the wage subsidy being above her normal wage, that they will pay only 80% of it. Is this right?

If the wage subsidy is being accessed for her she gets 100 per cent of her pay if it is below the subsidy amount.

Our employer has applied for the subsidy but is saying they haven't received it yet from the government so we didn't get paid last week. Is that legal? What are my rights here?

If the employer can't afford to pay wages one week they could ask for it to be deferred.

Should employees of temp agencies be paid during this time?

Temporary or casual workers can be included in a wage subsidy application. What they are paid would be determined by their average wage over the past year. A truly casual employee would not be entitled to any additional top up to the wage subsidy level because they are not otherwise entitled to pay when they are not working.

What is happening with Good Friday and Easter Sunday, given changes the government has announced?

The Holidays Act and requirements within it still apply.

I'm running a Airbnb business as a sole trader. Could I apply for a wage subsidy, since I am not able to operate it as usual due to the lockdown?

If because of Covid-19 your business has suffered a greater than 30 per cent reduction in revenue you could be eligible for the wage subsidy.

My employer applied for and received the wage subsidy for me. But then terminated my employment in a trial period. What are my legal options?

Irrespective of whether or not you have a lawful trial period in your agreement the clear requirement of accessing the wage subsidy is that you keep your employees employed for the 12 weeks of the scheme. However, this could be a potentially difficult situation for an employee to bring an unjustified dismissal claim.


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