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Workforce Flexibility and Government Incentives in times of Covid-19 - New Zealand

Short-term State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

No

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

No

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

The Government has introduced a Wage Subsidy and COVID-19 Leave Subsidy which is available to businesses, registered charities, non-governmental organisations, incorporated societies and post-settlement governance entities. To be eligible the employers must be a New Zealand registered operating business, the must be employees are legally employed in New Zealand and be able to show that:

  • it has experienced a minimum 30% decline in actual or predicted revenue over the period of a month from 1 January 2020 through to 9 June 2020 in comparison to the same month last year (for businesses older than 12 months), a previous month (for businesses younger than 12 months or have has significant growth) or the previous year’s monthly average (for the self-employed) and that decline is related to COVID-19;
  • it has taken active steps to mitigate the impact of COVID-19 on its business activities (such as engaging with their bank or financial advisor, Chamber of Commerce, industry association or the Regional Business Partner Programme);
  • it will make best endeavours to retain employees named in the application and pay them a minimum of 80% of their normal income for the subsidised period, presumably being the 12 weeks from when applications could first be made (17 March 2020).
  • Self-employed people with variable monthly incomes are eligible if they can demonstrate the revenue loss assessment against the previous year’s monthly average (eg. 30% loss of income attributable to COVID-19 comparing March 2020 to the average monthly income in the period March 2019 to March 2020).

    • The wage subsidy will be paid at a flat rate of:
    • $585.80 for people working 20 hours or more per week
    • $350.00 for people working less than 20 hours per week.
    • The wage subsidy is paid as a lump sum and covers 12 weeks per employee.
      The COVID-19 Leave Subsidy will be available to those employees that:

  • need to self-isolate (as per the Ministry of Health directions)
  • cannot work because they are sick with COVID-19, or
  • cannot work because they are caring for dependents who are required to self-isolate or are sick with COVID-19.
  • The COVID-19 Leave Subsidy will be paid to employers who have eligible employees and they must pass the payment onto their employees in full.

    The COVID-19 Leave Subsidy will be available for 8 weeks from 17 March 2020. Employers will be able to apply for this more than once.

  • The COVID-19 Leave Subsidy will be paid at a flat rate of:
  • $585.80 to a person working 20 hours or more per week
  • $350.00 to a person working less than 20 hours per week.
  • Employers will be able to apply for this subsidy as and when needed.

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

  • Application is made through Work and Income (Government site) (https://workandincome.govt.nz/products/a-z-benefits/covid-19-support.html). Employers are to provide their IRD No, business name, business address, names of employees, employee IRD numbers and contact details for their business and employees.

    Employers may make application at any time, however we are encouraging them to make application as early as possible.

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 27 March 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.