A liquidator will be reporting the Director of a company after the misuse of over $70,000 of wage subsidy money.

The company had been struggling to pay its debts over the past year. A liquidator was appointed when the company failed to repay a $50,000 loan to a creditor. The liquidator noticed that the subsidy payment of $70,296 had been used to pay for company expenses, and not pay staff.

Although the Director transferred some money back into the subsidy account, the liquidator said other creditors had priority over the employees. Company employees probably wouldn’t see any of the subsidy payment.

Despite the Director arguing there had been sufficient money in the account, the liquidator disagreed and said he would be making a report to the Ministry for Social Development about the conduct.

The Government has announced that it has begun auditing recipients of the wage subsidy.

Employers that received the subsidy that should not have, or have used the money for other expenses, may be asked to return the subsidy or be prosecuted.

If there are concerns that an employer has not been honest when applying for the subsidy or not using the wage subsidy correctly, it is wise to speak with a professional experienced in the area.

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Alan Knowsley
Employment Lawyer