It’s been over a week since the entire nation first heard the call to enter a strict lockdown and since then, a lot has changed:

  • There are over 300 locations of interest, more than 13,000 close contacts across New Zealand, and 107 confirmed cases;
  • Employers can now apply for financial support through the wage subsidy, resurgence payment and other forms of relief;
  • Face coverings are compulsory for all visitors to, and staff working in, essential businesses; and
  • Contact tracing is now mandatory at all levels.

On Monday 23 August, the Government extended the nationwide lockdown for a second time; Auckland will remain at Level 4 until 11:59 pm on Tuesday 31 August, while the rest of the country will remain at Level 4 until Friday 27 August.

It’s normal to be unsure of your employer obligations in a rapidly changing situation, such as the current COVID-19 outbreak. To give you a helping hand, we’ve set out some guidelines to help you plan and prepare your workforce for an extended lockdown. Inside this guide, you’ll find advice on understanding employee pay and leave entitlements, asking staff to take annual leave, consulting on temporary changes to work and pay, and minimising risk to your business.

COVID-19 pay and leave entitlements at Alert Level 4

Under the Employment Relations Act 2000 and the Holidays Act 2003, below are the pay and leave entitlements for employees in different situations at Level 4.

1. Employees who work from home or at the workplace of an essential business.

Leave: not applicable unless an employee has requested to take a particular type of leave during this time.

Pay: these employees are entitled to their normal pay rate for every hour that they work. The pay they receive should be no less than the applicable minimum wage. As an employer, you cannot change an employee’s hours or wages unless proper consultation and a written agreement precede any alterations.

Financial support for both the cost of payroll (the August Wage Subsidy) and some relief for the cost of business (the Resurgence Support Payment) is now available. Your business must meet specific criteria to be eligible for financial support in this lockdown; this includes experiencing a percentage decrease in revenue or capital raising ability (40 per cent for the August Wage Subsidy and 30 per cent for the Resurgence Support Payment). We write more on eligibility and how to apply for financial support at Level 4 in this article.

 2. Employees who are unable to work from home or in the workplace and are not sick.

Leave: you should check your employment agreements and any leave options should be discussed and agreed upon with your employees. Special paid leave should be considered in the short term. Other leave options can include using annual holidays, leave without pay, long service leave and alternative holidays (if relevant), or other payments (even partial payments) for a certain period – or any combination of these.

Pay: any leave should be paid in accordance with the Holidays Act and the applicable minimum wage rules.

There are several options for financial relief available to businesses in this situation. Your business may be eligible for the COVID-19 August Wage Subsidy and the COVID-19 Resurgence Support Payment as well as Small Business Cashflow (Loan) Scheme. You can find out more about these financial support options and your eligibility here.

Employers receiving the August Wage Subsidy should endeavour to pay 80 per cent of employees’ normal wages. In no case can the payment be less than the subsidy itself.

3. Employees who are sick or are caring for a dependant who is sick.

Leave: if an employee is sick or looking after a dependant who is unwell, that employee is entitled to use their sick leave.

Pay: your employer obligations are to pay sick leave in accordance with the Holidays Act.

There are ‘Short-Term Absence’ payments available for employees who are required to self-isolate while waiting for a COVID-19 test result.  The ‘Leave Support Scheme’ offers relief to pay workers who are in self-isolation because they have COVID-19, or because a health official has ordered them to self-isolate, and they aren’t able to work from home.

If your business has experienced a loss in revenue, there may also be other financial support available in the Resurgence Payment or Wage Subsidy payment.

4. How can you lawfully require an employee to take their annual leave during Level 4?

 The taking of annual leave must be agreed between you as the employer and your employee.  You can only require your employees to take annual leave if you can’t reach an agreement with your employee about when they’ll take their annual holidays, or you’ve given them at least 14 days’ notice of the requirement for your employee to take annual leave.

During a COVID-19 lockdown, you may wish to ask some employees – those who are not at the workplace, not working from home, not sick, and haven’t agreed to take some form of leave – to take their annual holiday. To lawfully request this of your staff, you must provide at least 14 days’ notice.

5. What are the steps to consult with staff around changes to work and pay at Level 4?

To make any changes to your employees work arrangements or pay (temporary or permanent) you must carefully act in good faith; this means you have a duty to discuss the implications of the COVID-19 response on working arrangements with your employees. And, any changes you make following these discussions must be consulted on and agreed to by both parties. HR Assured clients have access to a letter template that can assist with communicating compliantly to employees about temporary changes to working and pay arrangements.

To proceed with a change such as temporarily closing your workplace or reducing staff hours, your employer obligation is to act in good faith and follow other process arrangements including the three steps below:

  1. Consult with employees and their representatives.
  2. Provide time to respond to proposals.
  3. Consider their comments.

You must also make sure to record in writing any changes to an employee’s employment agreement, whether it is temporary or permanent. We recommend seeking professional advice on the correct and proper process in these types of situations.

 We know that keeping up with changing advice around alert level restrictions is time-consuming and complex. If you need advice on managing your people and workplace at Level 4, the employment experts at HR Assured can help you.

For HR Assured clients, contact our 24/7 Telephone Advisory Service.

Not an HR Assured client and need some advice? Contact us today to arrange a confidential, no-obligation chat.