Wage Subsidy FAQs

If I have an employee away sick with Covid and get the Covid Leave Support Scheme subsidy; what exactly do I need to pay them?

When you take the wage subsidy, it reminds you that employment legislation still stands and you must pay what is in the employment contract i.e. if 40 hours @ $30, then that is what you should be paying. Also, when taking the subsidy, you are agreeing, you must try your hardest to pay at least 80% of their usual pay, but if you really can’t afford that, then pay the subsidy as a minimum. If this is the case, at the employee’s choice they can then top that up with sick leave, if available. Remember, this is all about sitting down with your employee and discussing and getting their agreement, then getting it down in writing. Note: Just remember, when agreeing to 80% or the subsidy, be very careful how you word it, as if 80% puts them below then the minimum wage, then this is illegal. Instead, of saying 80 hours, say we will pay for 32 hours of your 40 hours, then they top up 8 hours of sick leave. Refer to the declaration you must agree to: Declaration - COVID-19 Leave Support Scheme - Work and Income I found this site (Leave and pay entitlements during COVID-19 » Employment New Zealand) and it says if some-one is sick during Covid, then they use their leave entitlements; is that still correct when getting the Covid Leave Support Scheme subsidy? In a normal case if there was no subsidy , then yes, that is correct. Or, if you choose not to get the subsidy. However, as part of the declaration when applying for the subsidy, you agree to try your hardest to pay at least 80% of their usual pay. It also states, you will not unlawfully compel employees to use their leave entitlements. As this stage, the Government has not advised that you can use the subsidy to pay sick leave entitlements. What happens if they agree that we can’t afford the 80% and can only pay the subsidy, yet they don’t have sick leave? Then they can elect to take annual leave, but only if they choose. Or, some other options could be sick leave in advance (not necessary a good thing though if far away from their anniversary date). Or, truly consider can you really not afford to top them up or give them ‘special leave’. If I have an employee away due to being a household contact and get the Covid Leave Support Scheme subsidy; what exactly do I need to pay them? It is very similar to if they have Covid. When you take the wage subsidy, it reminds you that employment legislation still stands and you must pay what is in the employment contract i.e. if 40 hours @ $30, then that is what you should be paying. Also, when taking the subsidy, you are agreeing, you must try your hardest to pay at least 80% of their usual pay, but if you really can’t afford that then pay the subsidy as a minimum. In this case they are not sick (unless, they have a dependant that is sick with Covid, which means they would have to stay home anyway to look after them), therefore, should not be topped up with sick leave. Instead, at the employee’s choice they can then top that up with annual leave, if available. Remember, this is all about sitting down with your employee and discussing and getting their agreement, then getting it down in writing. Refer to the declaration you must agree to: Declaration - COVID-19 Leave Support Scheme - Work and Income