Wage Subsidy Questions
Question
We are an essential service but due to covid19 we are working reduced hours and most staff are working approximately 50% of their working day. We are paying those employees 80% of their pay by topping up with annual leave. We also have a few workers who are working their normal hours. Can you please clarify the following:
Do we have to top up to 80% without using their annual leave, or can it be topped up with annual leave
Are the employees who are working 100% of their hours entitled to 100% of their pay, or do we reduce this to 80% regardless of the fact that they are working 100%
Answer
A 1: An employer cannot require an employee to take annual leave unless 14 days' notice is given. Decisions about annual leave need to be made in consultation with employees, by negotiating in good faith. We'd suggest that this includes advising your staff of their rights in this regard, before asking them to use their annual leave for a top-up.
If you are able to top up the wages of your staff who are receiving the subsidy to 80% of their normal wage, then you are required to do so. If doing so will bring the business down, then the minimum you need to pass on is the subsidy itself. Finance Minister, Grant Robertson, clarified in his updated press release that you can pay your staff their normal wage if that is less than the subsidy.
A 2: Also in the above release, the Minister clarified this point as follows:
The wage subsidy is a Government payment to help employers pay wages. It does not change any other employment law obligations, meaning employees must be paid appropriately under their employment agreements for the hours they do if they work during the lockdown.
Employees who are working during the lockdown should therefore be paid their normal wage.
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.