Wages and Leave Subsidies – Questions & Answers

Q&A Wages and Leave Subsidies

ID

Question

MBIE comment/decision

1

Is the WAGE subsidy only for supporting employers to maintain staff who can still work, and they’re paid the subsidy plus topped up to 80%?

Yes.

Employers must commit to pay staff at least 80% of their income while they are subject to the wage subsidy scheme.

2

Are staff who cannot work from home eligible for the LEAVE subsidy rather than the WAGE subsidy? If so, does that would mean the employer would have to pay them the $585, but not have to top them up to 80%?

No.

Employees who are sick or caring for sick dependents can access the leave subsidy.

Employers can access the wage subsidy to help them to pay employees at least 80% of their income.

The employer needs to determine the best way for their business to address ‘unable to work from home’ issues.

3

If your business cannot afford to pay up to 80%, can they pay the subsidy rate only?

No.

Under the scheme, you must commit to pay at least 80% of the employee’s income.

However, ‘best endeavours’ mean the employer and employee can negotiate an alternative approach. (For instance, the employee may accept a 60% wage if that means more of their workforce colleagues can also be paid income). Such best endeavours would need to be documented by the employer.

4

“Pay a minimum of 80% of normal income” – does normal income include shift allowances, overtime, commissions, Employer KiwiSaver Contributions?

Yes.

The wage subsidy is to help employers pay wages, it does not change anything else.

5

Can a business place staff of leave without pay rather than making them redundant? If so, can they access unemployment benefits?

If the employer and employee agree, then yes.

We anticipate the wage subsidy would mean that employers can place a worker ‘on leave with pay’.

If the employee remains employed then they cannot access Job Seeker Allowance. There may be other allowances that the employee can access (such as accommodation or hardship).

6

After shutting down our business am I able to go in (alone) to complete maintenance and cleaning, along with payroll etc? I won’t be seeing anyone or interacting with anyone but understand the intention is to stay at home?

If it is a non-essential service, COVID-19 Alert Level 4 means you must stay at home.

7

What happens if someone works at essential business, but has a high-risk family member at home – are they covered via leave payment?

Yes

8

Any guidance or information on whether staff will have access to their kiwi saver, ie relaxed the threshold or process for hardship payments?

Not being considered at this stage.

9

When applying for the wage subsidy for our company, do we really have to add each employee on a separate line? Our business has over 1000 employees and that will take an extremely long time.

MSD is working on enabling ‘bulk upload’.

10

Can Force Majeure be used in this situation if there is not a Force Majeure clause in a contract (either contractor’s contract, or employment agreement)?

The business should seek legal advice.

11

Do we need to apply for confirmation of ‘essential service’ status and if so how do you do this – will we need to give our staff confirmation to show if stopped on route to work.

See: https://covid19.govt.nz/government-actions/covid-19-alert-level/essential-businesses/

12

Are the wages and leave subsidies gross or net of tax?

Subsidy to the employer is without tax.

As the subsidy is to help employers to pay wages, once paid as wages these are subject to all normal deductions, including tax.

13

Are the subsidies subject to normal wage deductions?

Subsidy to the employer is without tax.

As the subsidy is to help employers to pay wages, once paid as wages these are subject to all normal deductions, including tax.

14

Can charities, not for profit agencies and clubs apply for the subsidies?

Yes.

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