Who can get the Resurgence Wage Subsidy?
To qualify:
– your business must be registered and operating in New Zealand
– your employees must be legally working in New Zealand
– the business must have experienced a revenue drop of at least 40% because of COVID-19, for a 14-day period between 12 August to 10 September, compared to a similar period last year
NOTE: You can’t receive the Resurgence Wage Subsidy if you’re already getting other COVID-19 payments like the Wage Subsidy Extension or the Leave Support Scheme for the same employee at the same time.
Are the payment rates different for the Resurgence Wage Subsidy?
No. Payment rates remain unchanged. The subsidy is for two weeks form the day you submit your application, and will be paid a flat rate of:
– $585.80 (gross) per week for people working 20 hours or more per week (full-time rate)
– $350 (gross) per week for people working fewer than 20 hours per week (part-time rate)
NOTE: You can also apply for the subsidy for any casual employees who were employed by you at the time you apply, and would have expected to work during the time you will receive the Resurgence Wage Subsidy.
How much can an affected employee receive from the COVID-19 Leave Support Scheme?
The Leave Support Scheme will be paid a flat rate of:
– $585.80 (gross) per week for people working 20 hours or more per week (full-time rate)
– $350 (gross) per week for people working fewer than 20 hours per week (part-time rate)
NOTE:The Leave Support Scheme is paid as a lump sum and covers four weeks per employee from the date you submit your application. You can re-apply for the scheme for the same employee in their fourth week of the payment period, if necessary.
How do I qualify as an eligible employer for the COVID-19 Leave Support Scheme?
The scheme is open to New Zealand businesses (other than in the state sector) that meet the usual criteria. If you apply for the scheme before 1pm on 21 August 2020, you will not need to meet on the of two tests below:
– experienced a minimum 30% decline in actual or predicted revenue over the period of a month when compared to the same month last year, and the revenue loss is related to COVID-19; or
– had your ability to support your employee to take leave negatively impacted due to the COVID-19 public health restrictions.
if you apply for the scheme after 1pm on 21 August 2020, you will not need to meet these tests. You can’t receive the Leave Support Scheme if you’re already getting other COVID-19 payments like the Wage Subsidy Extension or the Resurgence Wage Subsidy for the same employee at the same time.
What are my obligations as an employer when applying for the COVID-19 Leave Support Scheme?
Before applying for this scheme, you must have discussed the application with the affected employee, obtained their consent, and agree they fall into one of the eligible groups. You should also have explored other ways to support them (e.g. paid leave options such as existing sick or annual leave entitlements). Regardless of whether you applied for the previous Essential Workers Leave Support or the renamed Leave Support Scheme, the way you pay your employees has not changed:
– You must try your hardest to pay the employee named in your application at least 80% of their usual wages or salary; or
– If that isn’t possible, you must pay at least the rate of the Leave Support Scheme (unless the employee’s usual wages or salary is lower, in which case to continue paying their usual wages or salary).
Note: Neither you or your employee need to provide medical verification to the Ministry of Social Development. When you apply, you will need to confirm that you have read, understood and agree to a declaration, including declaring you’ve confirmed with your employee that they meet Ministry of Health guidelines. You can find a complete overview of your employer obligations and a copy of the relevant declaration here.
Is the Wage Subsidy taxable?
Wage subsidies should be passed onto the employee by the employer and processed as part of the employee’s normal wages. All deductions (such as PAYE, KiwiSaver and child support) should be made as normal and can be processed through SmartPayroll.
Can I continue to use the Wage Subsidy to pay my employees once they go back to work during Alert Level 3 and Alert Level 2?
If your employees can go back to work during Alert Level 3 and Alert Level 2, you can continue to use the Wage Subsidy to pay your employees.
If you can only afford to pay your employees the Wage Subsidy amount, then your employee is only expected to work the number of hours that the subsidy would cover based on their hourly rate.
For example: If your employee has an hourly rate of $30, and you can only afford to pay them $585.80, you can only have your employee work 19.53 hours per week maximum.
What if I have already received the COVID-19 Leave Payment? How should I apply this in SmartPayroll?
Refer to the Wage Subsidy instructions, as the guidelines for paying out the Leave Payment are now the same as if you were paying them a Wage Subsidy. If paying the employee using the Leave Payment Scheme, we recommend entering an Admin Note on the Pay Details screen to indicate which subsidy you have used.
How much can I get?
The COVID-19 Wage Subsidy will be paid at a flat rate of:
– $585.80 for people working 20 hours or more per week
– $350.00 for people working less than 20 hours per week
The subsidy is paid as a lump sum and covers 12 weeks per employee.
Do I have to pass on the Wage Subsidy to my employees?
Yes, you are required to pass on the Wage Subsidy to your employees. And if you can, it is expected that you top this up to 80% of your employee’s standard wages/salary.
My employee normally receives less than the Wage Subsidy amount each week. Do I have to pay them all of it anyway?
Work and Income NZ advises that the wage subsidy is designed to keep your employees connected to you. Any difference should be used for the wages of other affected staff.
What are my obligations as an employer this time around?
Much like previous version of the wage subsidies, you are required to retain the employees named in your application for the duration of the Resurgence Wage Subsidy. If you’re receiving the Resurgence Wage Subsidy, you must:
– Try your hardest to pay staff at least 80% of their usual wages;
– If that isn’t possible, pa at least the rate of the Resurgence Wage Subsidy (unless the employee’s usual wages are lower than this amount)
– It will be paid to you as a lump sum at the same weekly rate as the Wage Subsidy of $585.80 per full time employee.
Businesses must also have taken active steps to mitigate the financial impact of COVID-19.
How do I apply for the Resurgence Wage Subsidy?
Applications for the Resurgence Wage Subsidy can be made from 1pm on 21 August 2020 until 3 September 2020. The online application process and information you’ll need will be similar to the Wage Subsidy and Wage Subsidy Extension applications. You’ll be asked to declare you meet the criteria and agree to the obligations for the use of the payment. As usual, all payments will be subject to audits and reviews. For more information on the eligibility criteria, employer obligations and how to apply, refer to the Work and Income website.
How should I record the Resurgence Wage Subsidy in SmartPayroll?
There is no requirement to specifically record any of the wage subsidies in the payroll system. However, if you do wish to keep a record of this in SmartPayroll, you can use the COVID-19 components discussed in previous communications. Our Wage Subsidy Guide provides a range of scenarios and examples that can be followed.
How do I apply for the COVID-19 Leave Support Scheme?
Only employers can apply for the Leave Support Scheme (not the individual employee). When you’re ready to apply, you will need to complete the relevant online form on the Work and Income website.
Who can get the Wage Subsidy Extension?
What you need to know:
– You must have had, or expect to have, a revenue loss of at least 50% for the 30 days before you apply, compared to the closest period last year.
– It will cover 8 weeks per employee from the date you submit your application.
– It will be paid to you as a lump sum at the same weekly rate as the Wage Subsidy of $585.80 per full time employee.
You’ll need to agree to some obligations, such as to:
– pass the subsidy on to your employees.
– retain your employees for the duration of the subsidy
– do your best to pay your employees at least 80% of their normal pay.
– take active steps to mitigate the impact of COVID-19 on your business.
For more information visit Work and Income NZ.
Does the employee continue to accrue annual leave while they receive the COVID-19 subsidies?
Short answer, yes they do. One of the obligations Work and Income states for receiving the Wage Subsidy (or other COVID-19 subsidies) is that you will not make any changes to your obligations under any employment agreement, including to rates of pay, hours of work and leave entitlement, without the written agreement of the relevant employee. No changes to leave entitlement should be made while receiving the subsidy. If we consider that annual leave accrual is the periodical accrual of annual leave which contributes to the employee’s annual leave entitlement, then we must continue to accrue annual leave for the hours that the employee was expected to work during the time they are receiving the subsidy. Anything less would indicate that the employer is not giving the employee their full leave entitlement.
What if you can only afford to pass on the Wage Subsidy to your employees?
If you have discussed with your employees in good faith that you can only afford to pass on the full amount of the wage subsidy to cover their normal hours and days of work, and their normal days of work have remained as 5 days per week, then their RDP will be based on their new wages, divided by 5 days e.g. $585.80/5 is
$117.16. If this has not been officially updated in the employment agreement, pay them their pre-COVID hours for the public holiday, and top up their wages using the remainder of the subsidy. Refer to Scenario 5 in the Public Holiday Guide.
I have employees that work variable hours. How do I work out whether they qualify for the full-time or part-time rate?
If your employee works variable hours, you can use an average to work out what rate to apply for. Use the average hours worked each week (use the average hours report to help you with this):
– over the last 52 weeks, or
– over the period of time you (or they) have been employed (if it’s less than 12 months).
If the average hours are:
– 20 or more, apply for the full-time rate
– less than 20, apply for the part-time rate.
Am I required to track my employees’ hours if they are working from home?
As your employees are still working their normal hours and being paid accordingly, there is no requirement to track this information separately in any way. Just record their hours the same as if they were at work.
Can I receive the Wage Subsidy for my employees if they’re working from home?
Yes. The payment is available to those who can work from home during the lockdown period, if your business meets the eligibility criteria. Refer to the FAQ regarding who can get the Wage Subsidy.
What if my employee worked some hours, but not as much as their standard weekly hours?
Refer to Scenarios 2 and 8 in the Wage Subsidy Guide.
Can an employee use their other leave entitlements during the lockdown period?
Employers and employees can agree to use any form of paid leave (e.g. annual leave) to cover their period of self-isolation. However, employees aren’t required to have used any or all their paid leave entitlements before they can receive the Wage Subsidy support paid to an Employer. Refer to Scenarios 3 and 7 in the Wage
Subsidy Guide.
