CORONAVIRUS / COVID-19 – EMPLOYMENT UPDATE
As Coronavirus / COVID-19 continues to spread many different legal situations are likely to arise as employees become ill and as business operations feel the impact of trade delays and loss of business.
The legal situations that arise from COVID-19 are important for employers because it raises a number of issues including remuneration, sick and annual leave, health and safety and redundancies. Unfortunately, the legal and practical issues are not straightforward and include whether employees are entitled to, or ought to, be paid and whether they are required to work, and what type of leave should be used to cover any absences. There is also the potential for an employer’s workplace to be affected to the extent that they cannot continue operating their business normally.
Not only do employers have employment obligations to fulfil but COVID-19 also impacts an employer’s Health and Safety obligations to provide employees with a safe workplace.
This is also a good time for employers to ensure that their workplace policies are up to date and it would be a good idea to introduce pandemic policies that are wide enough to not only cover COVID-19 but a range of emergency situations.
Our Employment Team is able to assist you with your queries regarding COVID-19 including providing general and specific advice to suit your circumstances as well as drafting and updating policies.
If you think that you need some assistance with COVID-19 related issues please do not hesitate to get in touch with our Employment Team on 03 2111 370 or by email to Damien.firstname.lastname@example.org or Jessica.email@example.com
Information for businesses
The New Zealand Government has taken a number of steps to protect New Zealand from the spread of COVID-19 (coronavirus).
Yesterday the government announced a $12.1b scheme to soften the blow which the pandemic would bring about. The government stated that this is the largest peacetime government spend in New Zealand history and that the government is expecting an economic recession larger than that of the Global Financial Crisis.
One part of the spend is to help businesses cope with the economic down turn, which is in it's infancy and likely to get much worse with the borders closed around the world for the foreseeable future.
Wage Subsidy Scheme
The government has announced a wage subsidy scheme which will enable full time workers to receive $585.80 and part time workers to receive $350 per week respectively for a 12 week period up to $150,000.00. Businesses must show a 30% decline in revenue on the previous year and must submit a declaration that they will:
- Using best endeavours continue to employ affected employees at a minimum of 80% of their income for the subsidy period (equivalent to 4 out of 5 days of the week).
- Take active steps to mitigate the impact of COVID-19 by engaging with their bank or financial advisor
The scheme will be available to all businesses in all sectors nationwide, and includes the self-employed and sole traders. The Ministry of Social Development expects to be able to make payments to eligible businesses starting in five days' time.
Leave and self-isolation scheme
The government will also introduce a leave and self-isolation scheme to support those who are unable to work because they are in self-isolation, are sick, or are caring for dependents in these situations. However, those who are able to work from home will not be eligible for this scheme.
Employers will apply for the leave on behalf of their employees self-isolating or sick. Affected full time workers will receive the same amount as under the wage subsidy scheme, being $585.80 per week for full-time workers, and $350 per week for part-time workers.
Payments are made by the Ministry of Social Development to employers, who will then be required to pass it on to the affected employees. The Ministry of Social Development will make payments to employers on a fortnightly basis once it receives an application.
The Government will implement changes to tax rules for the 2020–21 tax year to help stimulate business cash flow and investment, which include:
- the reinstatement of depreciation deductions for commercial and industrial buildings at a 2% diminishing value;
- increasing the threshold for provisional tax from $2,500 to $5,000;
- increasing the threshold for writing off low value assets to $5,000, before reverting to $1,000 in the longer term; and
- giving a time-limited discretion to Inland Revenue to remit use of money interest if a taxpayer is unable to pay on time due to the impacts of COVID-19.
Details of a specific $600 million aviation support package will be announced soon, and further measures will be announced in the Budget as a "second phase" of a broader recovery package.
For more information or legal questions you can also get in touch with us using the number above.