Coronavirus: Essential Workers Leave Support Scheme

Published April 06, 2020 (last updated November 18, 2020) -
coronavirus covid leave payment explained

Businesses classified as ‘essential’ are being urged to check if New Zealand’s latest coronavirus wage subsidy scheme is relevant to them, in order to avoid unnecessary confusion among their staff.

Employers are now able to access a new government payment scheme, offering financial support to frontline workers during the COVID-19 crisis.

What Is It?

The new leave support scheme applies to an essential business that has seen staff forced to take leave to comply with public health guidelines.

Affected employees include those who have tested positive to COVID-19 who are unable to work from home and need to self-isolate, those at higher risk of contracting the virus, those who have come into contact with someone who has tested positive, and those who have household members at higher risk.

The employer must also not be able to financially support their employee due to public health restrictions, e.g. the cost of paying for an employees’ leave, and paying for replacement staff is significant.

The initiative allows employers to pay these workers at the same flat rate as the Wage Subsidy Scheme of $585.80 for those working 20 or more hours a week (full-time rate), and $350 for those working less than 20 hours (part-time rate).

The money will be paid as a lump sum and payments will be made every four weeks per employee. Businesses can re-apply for an employee again in the fourth week, and can make further applications for additional workers who are eligible.

“It is welcome to see, is a great addition to the already available wage subsidy, particularly as the leave subsidy was no longer an option” said Employsure Senior Employment Relations Adviser Ashlea Maley.

“The coronavirus has already forced a number of employers to consider redundancies and it’s important that this new scheme is entered into correctly. It will also remove ambiguity for employers, who run essential services, and what to pay employees may not have been able to attend work due to public health guidance”

“If employers had not received the wage subsidy, and employees were in a position where they needed to isolate based on pubic health guidelines, that employee wasn’t entitled to any economic relief, so our essential service clients will now be happy that something is available.”

How Long is the Scheme?

The scheme will be available for at least the period while the nation is at Alert Level 4 public health restrictions, and it will be reviewed after eight weeks.

“Employers accessing the scheme should pay workers at either one of two rates,” said Workplace Relations and Safety Minister Iain Lees-Galloway.

“Workers should be paid at either their usual weekly income before COVID-19, if it is less than the relevant rate provided; or a minimum of the full leave rate, if the usual income before COVID‑19 exceeds the relevant rate. If that is the case, employers should also make best endeavours to pay at least 80 percent of the worker’s usual income before COVID-19.

“Not all workers in essential businesses will be in this position, but for those who are, it is a significant problem. For some workers this could be for the duration of the lockdown.

“We are ensuring essential workers have the ability to take leave and are not feeling pressured to come to work if they are vulnerable, sick or otherwise unable to work. The scheme will enable them to self-isolate and continue to receive an income in these circumstances,” he said.

Paying Staff

If business owners are receiving the COVID-19 Essential Workers Leave Support, they must try their hardest to pay the employee named in their application at least 80 percent of their usual wages.

If that isn’t possible, they need to pay at least the payment rate, e.g. full-time or part-time.

If an employee’s usual wages are less than the Leave Support, employers must pay them their usual wages.

Any difference should be used for the wages of other affected staff – the Leave Support is designed to keep employees connected to business owners.

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