Essential Workers Leave Scheme
About the Author:
Paul Wilton (editor)
CA with degrees in commerce, accounting and information technology. Paul worked overseas in the “Big 4” accounting firms and served as a director at Audit New Zealand before setting up his own consultancy. Author of A-Z of New Zealand Business Law, Paul has over 20 years of experience as a business owner and consultant. He joined FBA in 2004 and is totally committed to providing excellence in quality and value to our subscribers.
Employers may be eligible for support via the Wage Subsidy Scheme or the Essential Workers Leave Scheme if the employer has been adversely affected by COVID-19.
The Essential Workers Leave Scheme is designed to provide financial help for essential workers who need to stay at home to support public health goals. Employees and employers should work together to identify if they are eligible for the scheme.
Eligibility
The scheme applies to people who:
work in an essential service;
need to stay away from work; and
cannot work from home, for any of the following four reasons listed below.
The scheme defines four categories. It applies to those essential workers who cannot work because they:
are sick with COVID-19 and are required to remain in isolation until advised by a health professional that they can be released from isolation.
are in self-isolation due to close contact with an infected person. For example a worker identified as possibly infected through contact tracing.
have dependents who are either sick with COVID-19, or are self-isolating as a close contact. Caring for children or dependents is not an eligible ground for the Essential Workers Leave Scheme, unless the reason is COVID-19 related. Note, there is home-based help available for children of essential workers to allow them to perform essential services.
have serious health conditions themselves, or in their household, that put them at higher risk of becoming severely ill from COVID-19, and they have reached agreement with their employer that they will not work for the agreed period.
Employers are able to apply for workers that fall into one of the groups outlined above, based on the information provided by the worker. However, an employer may request proof such (as a medical certificate) that an employee or dependent is sick or at risk, if the leave is for three or more consecutive days. Employers may wish to take this step for their own peace of mind, especially if the employee is required for the essential service and/or the employer is topping up wages (see below).
The above looks at eligibility of employees. It is the employer that receives the subsidy to pass on to employees and an employer is only eligible if:
the business has experienced a 30 percent revenue loss because of COVID-19; OR
eligible essential employees need to take leave because of COVID-19 and the employer's ability to support such workers has also been negatively impacted by the COVID-19 public health restrictions.
Government subsidy under this scheme
Eligible employers will be paid in a similar way to those eligible for the Wage Subsidy:
$585.80 per week (gross, before tax) for each full-time worker (where they usually worked 20 or more hours a week before COVID-19), or
$350.00 per week (gross, before tax) for each part-time worker (where they usually worked fewer than 20 hours a week before COVID-19).
Employers should pass on the full subsidy to the relevant worker and make best efforts to top up the wage to at least 80% of the worker's usual wage pre-COVID-19. However, if the subsidy is more than the worker's usual wage, then the usual wage is to be paid. Any surplus available from the subsidy must then be used to fund essential business workers’ wages where possible.
The Essential Workers Leave Scheme will be available for at least the period while the nation is at Alert Level 4. The subsidy covers a four-week time period, with the option for businesses to re-apply for those same workers after four weeks, if necessary.
Payments are subject to the usual employer deductions (eg PAYE, Student Loan, KiwiSaver, or Child Support).
Employers should not apply for both schemes for the same employee at the same time. If an employer is eligible for both schemes, it is better for them to apply for a wage subsidy, as this is of longer duration and allows them to support their employees in more flexible ways (such as also paying wages if they are able to work from home or return to work).
Employers can apply on the Work and Income website. The scheme requires employers and employees to work together, and in each other’s best interests. In their application for the scheme, an employer will be required to sign a declaration outlining that they have discussed the application with their employee and are submitting it on their behalf.
FBA Editor
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