Summary of Covid-19 Employee Circumstances, Leave Entitlements and Pay

About the Author:

Paul Wilton (editor)

CA with degrees in commerce, accounting and information technology. Paul worked overseas in the “Big 4” accounting firms and served as a director at Audit New Zealand before setting up his own consultancy. Author of A-Z of New Zealand Business Law, Paul has over 20 years of experience as a business owner and consultant. He joined FBA in 2004 and is totally committed to providing excellence in quality and value to our subscribers. 

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The following table has been prepared by the Ministry of Business Innovation and Employment (MBIE) to provide guidance on employee leave and pay, to ensure compliance with the Government Covid-19 rules.

In all options in this table, the employer and employee should aim first to reach agreement in good faith on what approach will be taken. Both parties are encouraged to seek advice to ensure that the options chosen are the best available in the circumstances.

Employee is:	Leave entitlements for employee	Pay entitlements
Employee is working: At home At the workplace, for an essential business	Not applicable as they continue to work.	Employee should be paid, as normal, for each and every hour that they work.
Employee is on annual leave	Employees can use their existing entitlements. Employees can agree to take annual leave in advance, but they cannot be compelled to do so.	Leave paid in accordance with the Holidays Act.
Employee is sick, or caring for a dependent who is sick	Employees can use their existing sick leave entitlements. If paid sick leave is not available, paid special leave should be considered. An employer and employee may agree that other leave is taken.	Leave paid in accordance with the Holidays Act.
Employee is not at the workplace, cannot work from home, and is not sick	Employer and employee should consult their employment agreement and discuss and agree options. Special paid leave should be considered especially in the short term while you discuss what happens next. Other options that could be considered include: annual leave leave without pay* long-service leave (if relevant) alternative holidays (if relevant) other payments (even partial payments) by the employer for a certain period of time any combination of the above. If the desired set of options are not provided for in the employment agreement, it would be necessary to negotiate a variation to the employment agreement. Note: if an employer believes that broader variations are needed to hours or other aspects of the agreement, the employer should seek restructuring guidance.	Leave paid in accordance with what has been agreed, including being compliant with the Holidays Act.
Employee is not at workplace, not sick, and has not agreed some form of leave with employer	If the parties cannot agree, the employer can direct the employee to take entitled annual leave with at least 14 days’ notice.	Directed annual leave is paid in accordance with the Holidays Act.
Employee is absent from work without agreed leave.	Employer and employee should discuss options available for what happens in this situation, but could include unpaid leave.	Employer and employee should discuss options available for what happens in this situation, but could include unpaid leave.

Ministry of Business Innovation and Employment (MBIE)

* In cases where a government subsidy relating to COVID-19 has been granted to support employees, these employees must be paid in accordance with the terms of the subsidy.

FBA Editor

THE GOVERNMENT CONTINUES TO MONITOR THE MEASURES THAT THEY ARE TAKING IN RESPONSE TO COVID-19 AND THESE MAY BE CHANGED AT NO NOTICE, AS THEY SEE FIT. IT IS FAIR TO POINT OUT THAT WE ARE BUSINESS ADVISORS AND NOT LAWYERS.  OUR ANSWERS ARE BASED ON OUR UNDERSTANDING OF THE SOMEWHAT LIMITED INFORMATION THAT HAS BEEN MADE AVAILABLE PUBLICLY AT THIS POINT.

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