COVID-19 AND THE WORKPLACE: Your FAQs, answered*
General / 30 March 2020
With frequent changes to Government advice on what support is available for businesses through the COVID-19 crisis, it can be hard to keep up with what this means for your business. The arrangements businesses have been forced to put in place swiftly remain subject to potential challenge, including by personal grievance, Labour Inspector and WorkSafe review, to name just a few, where they cut across other relevant laws, workplace policies and employment agreements. We’ve compiled answers to your FAQs below, but this is no substitute for specific legal advice for your situation and we recommend you consult our team on what this all means for you to manage the risk of claims.
*Answers below are based on guidance from the Government as of 30/03/2020 and may be subject to change.
COVID ALERT LEVEL
|Where can I find up to date information about the Government’s response to COVID-19?||The Government is publishing guidance on its website which also directs you to other relevant websites including the Ministry of Health (MOH) and Work and Income New Zealand (WINZ).
The Government’s position in respect of vulnerable or “at risk” workers, the wage subsidy scheme, and the leave scheme has changed often to date. To stay current, we recommend revisiting the above sites daily.
|What does Alert Level 4 mean for workplaces?||A range of measures will be in place for workplaces during Alert Level:
DO WE HAVE TO CLOSE OUR BUSINESS?
|“Essential services” vs non-essential services||All non-essential services must have shut down their business premises. Services may be able to continue if work can be carried out from home. If that’s not possible, then the business needs to cease operations while Alert Level 4 is in place.
Essential services can continue if the service can be carried out in a way that eliminates or minimises the risk of spreading COVID-19. Essential work that can be carried out remotely should be. The Government has released an updated list of essential services/businesses.
If you are unsure whether your business is an essential service, the Government has advised that you should shut. You can seek advice from the Ministry of Business, Innovation and Employment’s (MBIE), who decides whether a business is an essential service or not. You can contact MBIE on
|What if aspects of the business are essential?||Your business may operate non-essential and essential services. Essential aspects of the business can continue long as it can be carried out in a way that eliminates or mitigates the risk of spreading
COVID-19.If your business is part of the supply chain for essential businesses, it can continue to supply those critical products and services to essential businesses only.
|Can we refuse to shut down if we’re a non-essential service?||
No. If you are a non-essential service, you must already be closed.
|Are there additional requirements for the primary and food supply chain sector?
i.e. farms, meat processing plants, vets, tractor repair services, motorbike repair services etc.
|The Ministry of Primary Industries (MPI) is the lead agency for essential services in the primary and food supply chain industries.
MPI have published a non-exhaustive list of what it considers to be a key service. On the “Safe Practice” application form, MPI lists a number of different sectors including:
Businesses that have less than five employees and cannot achieve social distancing of your workers or businesses with more than five employees must have registered for Safe Practice before
|The Safe Practice registration will ask you to provide information about actions you will take to protect your workers. It includes questions around:
|What special health and safety obligations apply during this epidemic?||PCBUs continue to have an obligation under the Health and Safety at Work Act 2015 (HSWA) to control risks by eliminating, or if that is not possible, to minimise the risks associated with a hazard.
Employers owe HSWA obligations to workers working remotely from home and workers who cannot work remotely and are carrying out work for an essential service.
You will need to consider whether workers’ workspaces within their homes are appropriate and whether they have adequate technology and office equipment to ensure they can carry out work safely. You have a duty to eliminate and minimise risks as far as reasonably practicable, and you should carry out an assessment (remotely) of the workplace with your workers. The Government has published a helpful guide setting out considerations, accessible here.
Working for an essential service
Examples of practical steps to eliminate and/or mitigate the risk posed by COVID-19 for essential businesses that cannot operate remotely include:
AT RISK OR VULNERABLE WORKERS
|Who is more vulnerable or “at risk” to adverse outcomes of COVID-19?||Vulnerable or “at risk” people are those who are at higher risk of catching/being affected by
COVID-19. This includes people:
|What do at risk/vulnerable people need to do?||At risk or vulnerable workers need to take more precautions to protect themselves against
COVID-19 and avoid close contact with people who have colds or flu-like symptoms. Additional measures can take include staying home.The Government has indicated it provide more guidance in respect of at risk/vulnerable workers shortly.
|Can we direct at risk/vulnerable workers to stay home?||According to MOH guidelines, if a vulnerable or “at risk” individual does not need to self-isolate, they can continue with normal activities, however other individuals are advised to reduce their close contact with vulnerable or “at risk” individuals they are living with.
Based on updated information from the Government (which we anticipate may change at some point in the future in order to protect vulnerable/at risk individuals) sending someone home or not offering them work due to their risk status may mean that you are obliged to pay them normally and you also run the risk of those individuals later raising an unjustified disadvantage or discrimination claim. This is a complex issue, given that you have competing obligations under the HSWA, Employment Relations Act 2000, and the Human Rights Act 1993.
It is recommended that you talk to your employees that are more vulnerable and consider allowing them to stay home if that is what they would prefer. If in doubt, they should contact their health providers and seek clarification around whether they are fit to continue to work or otherwise and pass that information on to their employers.
Health and safety obligations if employees want to keep working
If essential services vulnerable workers want to work, and you consider that you cannot take steps to adequately eliminate or mitigate the risks associated with COVID-19 given their more at-risk status, you could require them to provide you with evidence (at your cost) that it is safe for them to continue working during Alert Level 4 and/or propose to suspend them on pay whilst that medical evidence is obtained.
OBLIGATIONS FOR EMPLOYEES WHO CANNOT WORK
|What do we have to pay employees that can’t work?||If employees are not “ready, able and willing” to work, then you are not required to pay them.
You can agree for them to use their annual leave and/or alternative days, but you do not have an obligation to agree.
|Can we force employees to take annual leave?||Annual leave should be taken by agreement. If an employee won’t agree to take annual leave, you can direct them to take annual leave by giving them 14 days’ notice in writing of that requirement, however you can only force them to take any outstanding annual leave entitlement and not accrued annual leave.
|When should we pay employees sick leave?||Sick leave should only be paid if employees are sick or injured, or caring for dependants who are sick or injured.
If employees cannot work simply because they’ve been told to self-isolate by the Government and/or because your business is not an essential business, that does not entitle them to sick leave, even if they have agreed they will take this to be paid through an Alert Level 4 shutdown.
|How should we treat public holidays that fall during the government enforced lockdown?||Employees are entitled to be paid for public holidays that fall on a day that would otherwise be a working day for them or if a public holiday falls during a period of annual leave.
What is an otherwise working day?
You should try to reach agreement with your employee about whether the public holiday is an “otherwise working day” and take into consideration the employment agreement, work patterns, and other relevant factors including whether the employee works only when work is available, your rosters and systems and the reasonable expectations of the parties that the employee would work on the day concerned. If you cannot agree, the Labour Inspector may determine whether a day would otherwise have been a working day, taking into account the same considerations set out above.
Which employees won’t be entitled to paid public holidays?
Which employees will be entitled to paid public holidays?
For more information on how to go about paying employees for public holidays refer to sections 49 to 55 of the Holidays Act 2003.
|We have at risk workers who cannot work remotely; can we apply for the leave subsidy in respect of these workers?||The leave subsidy is no longer available. The Government has indicated it will announce another provision for leave for essential workers.|
|We have migrant workers on temporary work visas that are due to expire in the coming months, what should we do?||Any individuals whose visas expires before 1 April 2020 will need to apply for an interim visa to remain in New Zealand. Those individuals should contact Immigration New Zealand (INZ) as soon as possible to arrange this as most processing centres are now closed.
For individuals whose visas expire between 2 April 2020 and 9 July 2020 (inclusive), INZ has granted them an extension to their visa until late September. Individuals will be notified by INZ of this.
|We have migrant workers that need to be paid 30 hours a week because of their visa status, can we pay them and not our other employees?||In short, no. You cannot differentiate based on visa status and favour migrant workers over
New Zealand workers.If your business cannot offer 30 hours a week (in respect of certain visas), they will be non-compliant with the visa condition. Both the employee and employer will have an obligation to notify INZ.There are major industry calls for leniency and we understand INZ is considering its position.
I need to make employees redundant, is there anything I need to do for the migrant workers on work visas?
|After carrying out a fair and reasonable restructuring process where you consult affected employees on the genuine business reasons for this and what is proposed, you will need to notify INZ that a migrant worker has been made redundant if their ability to lawfully work in New Zealand is tied to your business.
The migrant worker may then apply for an alternative visa allowing them to stay in New Zealand.
EMPLOYEES WHO ARE WORKING
|What do we have to pay employees that can work?||You will need to pay employees in accordance with their individual employment agreements (IEA). If there is not enough work for all employees, or if your business cannot guarantee normal hours of work and/or afford to pay employees at their normal rate, you will either need to:
|What if an employee is refusing to do work?||
If an employee has not been directed by the MOH guidelines to self-isolate, or if they are fit to work and are not in/living with a person/s in the vulnerable or “at risk” category, then they should be reporting to work as per their terms and conditions of employment, and you may take action against them to address this, which may include an abandonment of employment or disciplinary process.
|Are we liable for meeting costs incurred by employees working from home?||If employees power/internet/phone bills increase whilst working from home, if they can prove the additional cost is due to work related expenses, then they may be entitled to some form of reimbursement.
If employees cannot prove that an increase in costs is due to working from home, then they would not be entitled to any reimbursement.
Employers could, however, be generous and offer a “work from home” allowance.
|What do we do when an employee needs to self-isolate or stay away from work?||If an employee of an essential business contracts COVID-19 or has been advised to self-isolate under the MOH guidelines (including essential workers that become unwell), you should reassure your employees, ensure relevant health authorities are involved, and act swiftly to contain the spread of COVID-19 and protect your people.
|Do we need to use additional PPE to address the COVID-19 risk?||This will depend on the kind of work you do. You should follow your risk assessment process to identify and address additional measures needed in your workplace.
The MOH says that the best defence against COVID-19 is basic hygiene measures, and it has published general guidance on its website about PPE for essential workers.
Employees should be reminded to:
Employees wearing gloves while working must still follow the basic hygiene measures above and should wash the gloves with soap and water for at least 20 seconds before removing them. Employees wearing disposable face masks should be reminded to:
For essential workers that work in the health sector, further specific requirements apply. For more information, see the MOH’s website.
|What financial support is the Government providing?||For an overview of financial support offered to organisations that employ employees or through which people derive their income, click here.
The Government has published rules in respect of the financial support offered, which is subject to change without notice, from time to time, so it is not always possible to provide conclusive advice or guidance around how the rules apply.
|The former leave scheme
This scheme has now folded and the Government has indicated it is considering a leave provision for essential workers
The COVID-19 leave and self-isolation scheme was introduced prior to the level 4 shutdown and was intended to financially supports workers to self-isolate, or stay home when sick with COVID-19 and was available for people that:
The leave subsidy scheme was available for a period of eight weeks and employers could apply for this subsidy more than once.
|The former wage subsidy scheme: applications made on or before 3pm on Friday 27 March 2020
The advice below is for businesses that applied for the wage subsidy on or before 3pm on Friday 27 March 2020.
The Government offered qualifying businesses $585.80 per week for individual employees that normally work 20 or more hours a week, and/or $350.00 per week for employees that normally work less hours, for a period of 12 weeks. This was paid as a lump sum and employers could only apply for it once.
In short, to qualify for the wage subsidy the business needed to:
Businesses that applied for the former wage subsidy should have:
In submitting the application, the business would have needed to make acknowledgments and agree to specific terms. The terms of the declaration you made at the time will likely be the terms that apply.
|The current wage subsidy scheme: applications made on or after 4pm on Friday 27 March 2020
The advice below is for businesses that applied for the wage subsidy scheme on or after 4pm Friday 27 March 2020, or for businesses that are yet to apply.
The Government is offering qualifying businesses $585.80 per week for individual employees that normally work 20 or more hours a week, and/or $350.00 per week for employees that normally work less hours, for a period of 12 weeks. This is paid as a lump sum and you can only apply once.
In short, to qualify for the wage subsidy the business needs to:
As there is a review process, businesses should obtain evidence of the actual or projected decline in revenue. Businesses should:
If the business is less than a year old, it will need to demonstrate the revenue lost against recent (or similar period) comparable figures (i.e. comparing March and February results rather than the prior year comparable figures).
In submitting the application, the business must make acknowledgments and agree to specific terms. The terms of the declaration you make at the time will likely be the terms that apply.
|I applied for the wage subsidy when there was a $150,000 cap, what can I do?||WINZ has advised that if you have already applied for and been granted the wage subsidy, when the cap was in place, you do not need to do anything because the difference will be topped up.
If due to the cap you only applied for some employees you were retaining over the shutdown period, you can contact WINZ to enquire about lodging or amending your application.
|I am wanting to make a wage subsidy application, what do I need?||Prior to making an application, you will need consent from your employees regarding sharing their personal information (i.e. their name, hours of work, date of birth, and IRD number) with WINZ to make an application for the wage subsidy, including informing them what other agencies may access this. That consent should, if possible, be in writing.
To make an application, you will need to provide WINZ with:
If you are a large employer (employing more than 100 employees) you can upload your employee data to a spreadsheet. See more information about large employer applications here.
As the online declaration is likely to continue to change, we recommend printing the declaration form and keeping file notes of advice received from Government department representatives to demonstrate compliance.
|My employees are paid wages and work different hours week to week, how do I work out their usual weekly earnings?||We suggest working out their average weekly earnings by calculating the employee’s gross earnings over the last 52 weeks and dividing that amount by 52.
If your workers are seasonal workers and only work certain months of the year, you can still calculate an average by adding up their gross earnings for the relevant period and dividing by the relevant number of weeks worked.
|Do I have to pay the whole subsidy to employees if they would not earn the weekly amount normally?||Confusion has arisen as to whether a subsidy is tagged to the individual employee or whether the employer could pool the subsidy and use excess from some employees to fund wages of other employees.
The Government said on 27 March 2020 that employers needed to provide the whole of the subsidy allocated to an individual employee to that employee. This would have resulted in certain employees being paid more than what they would have earnt had they been working.
This position was then changed on 28 March 2020 so that employers can take a pooled approach to manage the wage subsidy. The Minister of Finance said that:
“…to be absolutely clear if a person’s income is normally less than the subsidy they can be paid their normal salary…this is particularly an issue for part time employees…[that] normally earn less than $350 per week. We urge employers to use normal hours in the period before COVID-19 to assess the amount to be paid”.
|Does PAYE need to come off the wage subsidy payments paid to employees?||Yes. PAYE will need to come off amounts paid to employees and employer KiwiSaver contributions will need to be on top of sums paid to the employee(s).|
|Is there any risk that I will have to repay the wage subsidy?||If you apply for the wage subsidy, you will be asked to make a declaration.
You have an obligation to notify WINZ within five working days if something changes to affect your eligibility. You may also need to repay amounts granted if you were ineligible for these.
There will also be a review and audit process. If employers have provided false or misleading information you could be liable to an investigation, including for offences under the Crimes Act 1961.
For more information click here.
|Can I make people redundant during the twelve-week wage subsidy period?||On 27 March 2020 Finance Manager Grant Robertson has said that employers in receipt of the wage subsidy must not make any employee in respect of whom they have received the wage subsidy redundant during the twelve-week subsidy period.|
Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific solutions. Please seek legal advice from your lawyer for any questions specific to your workplace.