Financial Support for Businesses

While there has been no word on additional support payments for businesses affected by the spread of Omicron in the community, Finance Minister Grant Robertson did say that the Government would focus on supporting businesses via the leave support scheme.

“Any move to the red traffic light still presents restrictions on trading and the impact of this has been felt by our businesses who are recovering from two years of restricted trading,” noted Marisa Bidois, CEO of the Restaurant Association.

“We are awaiting feedback from Government on financial assistance for business that are closed down as a result of positive cases among their workforce or as a result of exposure via a customer.

“We know from the Omicron outbreak in other countries that the spread of this variant has caused a lot of uncertainty for businesses who are closing because of staff shortages as a result of exposure. We believe that businesses will need financial support to work through this new variant.”

Currently, there are only two forms of support payments available to businesses:

Short-Term Absence Payment

The Short-Term Absence Payment is available to employers to pay workers who follow public health guidance and stay home while waiting for a COVID-19 test result.  It’s also available to eligible self-employed workers. To be eligible, workers need to be unable to work from home and need to miss work while waiting for their test results.

It’s to help businesses keep paying eligible employees who:

  • cannot work from home, and
  • need to miss work to stay home while waiting for a COVID-19 test result (in line with public health guidance).

How much

There’s a one-off payment of $359 payment for each eligible worker. Employers or the self-employed can apply for any worker once in any 30-day period, unless a health official or doctor tells the worker to get another test.

Paying Wages to Staff

Where your employee has an entitlement to be paid as per their employment agreement or the law (eg by taking paid sick leave) you will need to use the subsidy to pay your employee their entitlement under the Holidays Act or their contractual entitlement while they are waiting for the relevant test result.

Where your employee wouldn’t otherwise have an entitlement to be paid if they are not able to work (eg if a worker has used up their paid sick leave so would be on unpaid leave) you:

  • should try to pay your worker as if they had worked that day, or
  • where this is not possible, you must pay at least the full amount of the Short-Term Absence Payment to the employee while they are waiting for the relevant test.

If your employee’s usual wages are less than or equal to the Short-Term Absence Payment, you must pay the worker their usual wages.

As an owner you are only obliged to pay entitled sick leave or, where the employee has none owing, you are only obliged to pay the full Short Term Absence Payment amount ($359).

How to apply

You can apply on the Work and Income website.

Leave Support Scheme

The COVID-19 Leave Support Scheme is available to employers to help pay employees who have been advised to self-isolate because of COVID-19 and can’t work from home. It’s also available to eligible self-employed workers.

To be eligible for a one-week payment of Leave Support Scheme your employee will have been advised to self-isolate for at least four consecutive calendar days.

If your employee needs to keep self-isolating for at least 11 calendar days or more and can’t work from home, you can apply for a second week payment of the Leave Support Scheme.

You can apply for third and subsequent Leave support payments for every further seven days of self-isolation.

How much

  • $600 per week for full-time workers and $359 per week for part-time workers.

Paying Wages to Staff

The employer must pay their employees any amount required by the employment agreement and employment legislation. The Leave Support Scheme requirements do not remove or reduce this obligation.

You must try your hardest to pay the employee named in your application their normal wages, or at least 80% of their usual pay. If that isn't possible, you need to pay at least the Leave Support Scheme payment rate (ie, full-time or part-time).

If you can't pay your employees their usual wages, then any reduction in wages or agreed hours of work requires good faith consultation and written agreement in line with existing employment law.

If your employee's usual wages are less than the Leave Support Scheme, you must pay them their usual wages. Any difference should be used for the wages of other affected staff - the Leave Support Scheme is designed to keep your employees connected to you.

How to apply

You can apply on the Work and Income website.

For information about employment law, visit employment.govt.nz

For information about modifying employment agreements during COVID-19, click here.