COVID-19 – Essential Workers Leave Scheme

The New Zealand Government has declared a state of emergency, and at present (until at least 22 April 2020), there are restrictions in place to help fight the spread of the COVID-19 virus.  A key part of the current restrictions is that non-essential places of business must be closed (but can still operate from home).  To ensure that the public still has access to the necessities of life, essential businesses are allowed to remain open and operational. 

This means that essential workers are placed at greater risk of being exposed to the virus, and to assist those workers, the Government has announced measures to assist, including the Essential Workers Leave Scheme.

Eligible employees:

There are four categories of essential workers that may be eligible to apply under the scheme:

1. Essential employees who are sick with COVID-19 and in isolation.
   
   
2. Essential employee in self-isolation due to close contact with an infected person.
   
   
3. Essential workers with dependents who are either sick with COVID-19, or whose dependents are self-isolating as a close contact.
   
   
4. Essential workers who have serious health conditions themselves, or in their households, that put them at higher risk of becoming severely ill from COVID-19, and who agree with their employer that they will not work for an agreed period.

Eligible employers:

An employer is only eligible if they are an essential service and:

• they have experienced a 30 percent revenue loss because of COVID-19; or
• their ability to support an eligible employee that needs to take leave because of COVID-19 has been negatively impacted by the COVID-19 restrictions.

How to apply:

Applications are made by eligible employers directly to Work and Income New Zealand, if they believe that an employee is an eligible employee based on the based on the information provided by the worker.

Payments:

The essential workers leave payments are available for a 4-week period, with options to re-apply after four weeks, if necessary.

Eligible employers will be paid:

• $585.80 per week (gross) for employee who usually work 20 hours or more per week; or
• $350.00 per week (gross) for employee who usually work fewer than 20 hours a week.

Employers should pass the full subsidy onto their effected employee (less deductions), unless the subsidy amount is more than what the employee would usually be paid.  In that case, the employer can use the remaining subsidy to fund the wages of other employees.  Furthermore, employers must use their best endeavours to pay at least 80% of the workers’ usual income before COVID-19. 

Employers will be able to treat the subsidy payments they receive as exempt income for tax purposes.  Employers must however continue to make the usual deductions before paying their employees (for instance KiwiSaver, PAYE, ACC levies, child support, and so on).  Employers are advised to contact the IRD, their accountants, or tax agent for further details. 

Read more about other support available to business and employers.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-priced Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins, we have an experienced family law team, who can answer your questions and put you on the right track. 

We are set up to help you remotely by email, telephone or video call.