As of 21 August 2020, applications are now open for the two-week Resurgence Wage Subsidy.
Following the recent return to Alert Levels 2 and 3, this payment is to assist employers in making wage payments to their staff, and is in essence a further extension of the Wage Subsidy Scheme. Eligible businesses will be entitled to a cash injection of up to $1,171.60 per employee.
Q. Is my business eligible for the Resurgence Wage Subsidy?
To be eligible, your business must have:
- had, or are predicting to have, a revenue loss of at least 40 per cent for a 14-day period; and
- this must be for any period of at least 14 consecutive days between 12 August 2020 and 10 September 2020, compared to a similar period last year; and
- the decline must be related to COVID-19.
The Resurgence Wage Subsidy payment is to assist with wage payments over a two-week period, starting from the date you apply. Applications may be lodged from 1pm on Friday 21 August 2020 until 11.59pm on 3 September 2020.
The rates for the Resurgence subsidy are the same as the rates under the previous Wage Subsidy scheme and the Wage Subsidy Extension scheme:
- $585.80 gross per week for employees working 20 hours or more per week; and
- $350 gross per week for employees working less than 20 hours per week.
You cannot apply for the Resurgence Wage Subsidy while receiving any other COVID-related support for your employees (e.g. the 12-week wage subsidy, 8-week wage subsidy extension or the Leave Support scheme). This is because you cannot receive more than one COVID-19 payment for one employee at the same time.
Q. What are my obligations under the Resurgence Wage Subsidy?
Employer obligations under the Resurgence Wage Subsidy are nearly identical to those under the Wage Subsidy Scheme and the Wage Subsidy Extension. Work and Income New Zealand (“WINZ”) has outlined the following obligations under the Resurgence Wage Subsidy:
- you must pass on the subsidy to your employees;
- you must retain your employees for the duration of the subsidy;
- if you have given an employee notice of redundancy before you apply for the Resurgence Wage Subsidy, you cannot apply for those employees unless the redundancy notice is withdrawn;
- you must try your hardest to pay your employees at least 80 per cent of their usual wages;
- you must pass on at least the full amount of the subsidy claimed to the employee for the two-week period. But, if the employee’s usual wages are less than the subsidy, you must pay the employee their usual wages. Any difference should be used to meet the wages of other affected staff; and
- you must have taken active steps to mitigate the financial impact of COVID-19.
In applying for the Resurgence Wage Subsidy, you must also advise your employees that they have the right to request all information held about them under the Privacy Act, and that they can utilise WINZ’s online Wage Subsidy Employer Search.
You cannot obtain the Resurgence Wage Subsidy for an employee that is currently receiving ACC earnings-related compensation. If an employee who is receiving the Resurgence Wage Subsidy is injured during the two-week subsidy period, the employee’s wages must be declared to ACC and the Resurgence Wage Subsidy payments will be deducted from their ACC payments.
Q. When would I need to repay the Resurgence Wage Subsidy?
Our previous article sets out scenarios where you may have to repay the Wage Subsidy payments (which also apply to the Resurgence Wage Subsidy). Scenarios include:
- surplus subsidy;
- redundancies; and
- resignations.
For more information on repaying the wage subsidy, please see our earlier article here.
Q. Can I still apply for the existing Wage Subsidy Extension?
Applications for the Wage Subsidy Extension (introduced on 10 June 2020) will remain open until 1 September 2020. The Wage Subsidy Extension payments are for an 8-week period.
It is recommended that employers who have not yet applied should reevaluate the circumstances of their business, as they could now be eligible for the Wage Subsidy Extension given the increase in Alert Levels. As the Wage Subsidy Extension covers an eight-week period, this would provide greater financial assistance than the Resurgence Wage Subsidy scheme.
Q. What changes have been made to the COVID-19 Leave Support Scheme?
The Government has modified the Leave Support Scheme to make it more accessible, namely by removing the revenue and “negatively impacted” tests for eligibility.
These changes apply from 1pm on Friday 21 August 2020. For clarity:
- applications made after this time, will no longer have to meet these tests; and
- applications made before this time, will still have to meet these tests.
The Leave Support Scheme covers all employees who:
- cannot attend the workplace as they are part of an affected group under the Ministry of Health guidelines; and
- cannot work from home.
To be eligible, you will have employee(s) who either:
- have tested positive for COVID-19 and are required to remain off work until they have been cleared by a health professional to be released from self-isolation; or
- have come into contact with someone who has COVID-19 and must self-isolate for 14 days (as required by Ministry of Health guidelines); or
- are at “higher risk” if they contract COVID-19, and the Ministry of Health guidelines recommend they stay at home while public health restrictions are in place; or
- have household members who are at higher risk if they get COVID-19 and Ministry of Health recommends the employee also remains at home to reduce the risk to them.
Again, you cannot apply for the Leave Support Scheme while receiving any other COVID-related support for your employees. This is because you cannot receive more than one COVID-19 payment for one employee at the same time.
If you have any employment related questions regarding the impact of COVID-19 on the workplace, you can see further information at our website edwardslaw.co.nz or contact our offices on:
Auckland: (09) 953 9757
Hamilton: (07) 981 3140
Tauranga: (07) 987 0914
