Moving alert levels with the COVID-19 Wage Subsidy

As New Zealand moves through the alert levels, some businesses and employees will be able to return to work. Find out how this impacts the Wage Subsidy.

This does not change your obligations to your employees under employment law and your employment agreement with them.

Employees should be paid for all the hours they work, as per their employment agreement with you. You can use the Wage Subsidy to help you do this.

Examples

  • Employee works full-time and returns to work full-time

    Fran is a chef at a café and couldn’t work from home as the country went into lockdown. During the lockdown, she and her employer agreed that her pay would reduce to 80% of her normal wages.

    Now at Alert Level 3, Fran is going back to work, as the café is providing contactless meal delivery. This means Fran will be back at work full-time and her employer will pay her usual hourly rate for the hours worked. Her employer can use the Wage Subsidy to help do this.

    Cherie has a business called Cherie's cafe. Her employee Fran is a chef.

    Business closes during Alert Level 4

    Cherie's business closed during Alert Level 4. She received the COVID-19 Wage Subsidy full-time rate for Fran.

    Cherie and Fran agreed that Fran's pay would reduce to 80% of her normal wages.

    Business re-opens under Alert Level 3

    When the business opened under Alert Level 3, Fran is going back to work full-time, as the cafe is providing contactless meal delivery.

    Cherie's obligations to the Wage Subsidy remain the same.

    This means Cherie must continue to pay Fran her usual hourly rate for the hours she works. Cherie can use the Wage Subsidy to help her do this.

  • Employee works 25 hours and returns to work with less hours

    Bob has a business called Bob's parts. His employee Sue was working 25 hours a week before Alert Level 4.

    Business closes during Alert Level 4

    Bob's business closed during Alert Level 4. He received the COVID-19 Wage Subsidy full-time rate for Sue.

    Bob paid Sue her usual wages (because Sue earned less than the full-time subsidy rate).

    Business re-opens under Alert Level 3

    When the business opened under Alert Level 3, Bob had enough work to give Sue 15 hours.

    Bob’s obligations to the Wage Subsidy remain the same, even if Sue works less than her usual 25 hours.

    This means Bob must continue to pay Sue the same wages she was getting before Alert Level 4, for the duration of the subsidy. If she works more than her usual 25 hours, she should be paid for all the hours she works.

  • Employee works full-time and returns to work with less hours

    Shelley has a business called Shelley's biscuits. Her employee Tai was working full-time and earning more than the Wage Subsidy full-time rate, before Alert Level 4.

    Business closes during Alert Level 4

    Shelley's business closed during Alert Level 4. She received the COVID-19 Wage Subsidy full-time rate for Tai.

    Shelley paid Tai the full-time subsidy rate. This equated to at least 80% of her full-time wage so Shelley didn't need to top her up.

    Business re-opens under Alert Level 3

    When the business re-opened, Shelley had enough work to give Tai 20 hours.

    Shelley's obligations to the Wage Subsidy remain the same, even if Tai works less than her usual full-time hours.

    This means Shelley pays Tai for the 20 hours she works, and tops her wages up to the full-time subsidy rate.