COVID-19 Government Support – What you may be eligible for as employer

You have probably seen that the Government has announced a COVID-19 package.

Assistance is applicable in two scenarios:

  • you are significantly impacted to pay wages because of the economic impact (30% or more revenue reduction), or
  • your employees are absent from work because of COVID-19.

Am I eligible?

You will be eligible for the subsidies detailed below if you can show that you have suffered, or are projected to suffer, at least a 30% decline in revenue (not profit) compared to last year, for any month between January 2020 and the end of the scheme in June 2020.

Applications can also be made based on forecast revenue loss within the period of the scheme.

All sole traders and the self-employed are also eligible.

What wage subsidies can I apply for?

Wage subsidies for eligible employers will be $585.50 per week for full time employees and $350 per week for part-time employers, for a period up to 12 weeks. The maximum that you can receive is $150,000.

You will need to undertake the following:

– A declaration that, on your best endeavours, you will continue to employ affected employees at a minimum of 80% of their income for the duration of the subsidy period (ending June 2020).

– You must take active steps to mitigate the impact of COVID-19 and sign a declaration form to that effect. This could look like engaging with your bank or seeking other financial advice.

You can apply now and for the next 12 weeks. Applications can be made here:  https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null

MSD aims to make the payments within 5 working days from the date of receiving the application (depending on demand).

What leave subsidies can I apply for?

If your Employees are absent because they have contracted COVID-19, are undertaking government ordered self-isolation or are caring for a dependent in either scenario, you will be eligible for a subsidy to cover the cost of this absence. Your employees must not be able to work from home during this absence.

This absence must have started on 17 March 2020 and can be backdated to this date. Employees who have travelled overseas since 16 March 2020 will not be eligible for their period of self-isolation (apparently on the basis that they have chosen to place themselves in that position).

The subsidy is $585.80 per week for full time staff and $350 per week for part time staff, up to a maximum of 8 weeks. If your Employee is required to self-isolate more than once, you will be able to apply for the subsidy on an ‘as needed’ basis.

These entitlements do not affect existing entitlements, meaning that the Employee’s sick and annual leave balance will not be impacted.

You will need to apply to MSD for these payments https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null

MSD aims to make the payments within 5 working days from the date of receiving the application (depending on demand).

The Government has also announced a relaxation on taxation requirements for this year, and we recommend you look into your eligibility for support on that basis.

For advice from our employment law specialists on any of the issues covered above, either call us on 04 801 5427, or contact us via email, and please stay safe:

Paul McBride (Partner) – paul@mdjlaw.co.nz

Guido Ballara (Partner) – guido@mdjlaw.co.nz

Frances Lear (Senior Associate) – frances@mdjlaw.co.nz

Saadi Radcliffe (Solicitor) – saadi@mdjlaw.co.nz

Emma Rose Luxton (Solicitor) – emmarose@mdjlaw.co.nz

Disclaimer – this newsletter is necessarily brief and general in nature.  You should therefore seek professional legal advice before taking any action in relation to any matter addressed above.  © McBride Davenport James