Essential services, particularly health care and supermarket workers, are providing an important service to New Zealanders during the COVID-19 Level 4 Lockdown. Doctors, nurses, midwives, pharmacists, supermarket workers, police and the like are all in the "front line" of the battle to eradicate coronavirus from our country. The Government has recognised that because of their interactions with people, these people are at risk of falling ill and so have come up with an Essential Workers Leave Support package.
The Essential Workers Leave Support package, released on 6 April 2020, means that if essential workers are not able to come to work because of Ministry of Health guidelines recommending they stay at home or because they can't work from home, their employer can apply for Leave Support.
To be eligible for the Leave Support package you MUST be an Essential Business and you must have essential services workers who are either:
are a higher risk if they get COVID-19;
come into contact with someone who has COVID-10 and must self-isolate for 14 days;
have tested positive for COVID-19 and are required to remain off work until cleared by a health official; or
have household members who are a higher risk if they get COVID-19.
Before an Essential Business applies for the Leave Support package, they must first have a discussion with their employee(s) about how best they can support them. This support may include the employee using their paid sick leave or other discretionary leave they have available instead of using the Leave Support package.
However, if the employer can't pay the full amount of the employee's pay, they can apply for the Leave Support to top it up. The Essential Workers Leave Support package is the same as the Wage Subsidy, however if the employer is already drawing on the Wage Subsidy for an essential worker, they cannot then also draw on the Essential Workers Leave Support package as well.
If the employer is not able to financially support their employee(s) due to the COVID-19 restrictions, they must at least pay the Essential Workers Leave Support subsidy.
Like the Wage Subsidy, the Essential Workers Leave Support subsidy is a gross payment subject to PAYE, KiwiSaver, Student Loan, Child Support payments and the like.
Also like the Wage Subsidy, if you are a self-employed essential worker, you can apply for the Essential Workers Leave Support package and also treat it as a gross wage payment, subject to PAYE etc.
The main difference between the Essential Workers Leave Support and Wage Subsidy is the Essential Workers Leave Support package covers only a four (4) week period. If the employee is still off work, then you need to re-apply for a further four week period and should do this in the third week so there is no gap in payment for the employee.
If an employee for whom you have received the Essential Workers Leave Support subsidy is able to return to work, then you can use the balance of their subsidy to pay other affected employees' wages. If you have no other staff to apply the subsidy to, then you must inform the Ministry of Social Development and return the money.
There is a good set of Q&As on the Work and Income website that will cover most employers questions.
If you require any advice or guidance about the Essential Workers Leave Support or Wage Subsidy, contact McKone Consultancy today for a free no obligation chat.