Following the government's announcement yesterday, you may be wondering what you need to do with your staff. All non-essential businesses are required to close from 11:59pm on Wednesday 25 March 2020.
Working from home
Where employees can work from home, they should do so and can be paid accordingly.
Suspension
Where working from home is not possible, for all or part of your operations, we recommend that employers suspend their employees' services (as applicable) during this shut down period.
If you have a force majeure or pandemic clause, you can rely on this but you still need to carry out a process before making a final decision (despite it appearing, on the face of the agreement, that you can just take certain steps).
In terms of process, to avoid personal grievances and claims, you will need to consult with employees, and propose to suspend their employment without pay until the business is able to reopen.
We have been working with clients to combine the suspension of work and the wage subsidies.
We can assist you with all of this.
Wage Subsidy
Wage subsidies are available for affected employers to subsidise an employee's pay by $585.50 per week for an employee who works 20 or more hours per week, or $350 per week for employees who work less than 20 hours per week. A condition of receiving the wage subsidy requires that you have a downturn in profit of 30% from the same month the year before, and that you make best efforts to top up an employee's pay to 80% of their normal pay from the subsidy amount where possible. It is not yet clear from the government whether it is essential that this top up occur in order to still receive the subsidy, however, presumably the government would prefer that employees receive at least the subsidy amount and remain employed, as opposed to receiving nothing (or moving on to a benefit). The purpose of the subsidy is to keep employees employed. You will need to apply for the subsidy from the Ministry of Social Development. If the wage subsidy is approved, the subsidy will be paid directly to you, and you should pass this on to your individual employees.
Where to from here?
We are happy to talk through the consequences of the COVID-19 situation for your business with you.
We have been assisting many employers over the recent weeks and, on an urgent basis over the last couple of days. We are rolling out the suspension process for a number of employees and are happy to assist you with this.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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