Changes to the Wages Subsidy - The Simple Facts28 March 2020
Following are Finance Minister Grant Robertson’s direct quotes:
“Businesses accessing the scheme must still undertake best endeavours to pay employees 80% of their pre-COVID income. Where that is not possible – in particular where a business has no activity whatsoever due to the shutdown and workers are not working any hours – they must pass on at least the whole value of the wage subsidy to each affected worker.”
In his announcement, the Minister also reminded employers of the need to honour employees’ contractual entitlements.
Many employers are asking employees to use their annual holidays at this time. There are some circumstances when an employer can direct employees to take annual holidays to which they have become entitled, by giving 14 days’ notice. However, in many employment agreements, mutual agreement may be required.
Where an employer is struggling to pay employees during the lockdown, reaching an agreement with them to take some of their annual holiday entitlement is a way of boosting their earnings above the wage subsidy of $585 per week, possibly to 80 % of their pre-COVID earnings, or even 100%. The alternative of course is that the employer may not be able to pay more than $585 per week.
These are unusual times that call for different approaches to life. Most of the experience so far demonstrates that when people understand the gravity of the situation, they make sensible decisions about accepting proposals aimed at maintaining their earnings as far as possible.
For further information on your situation, please call –
- Tony: 021 920 323
- Justine: 021 920 410
- Sam: 027 272 7295