The Government will support employers if you face laying off staff or reducing their hours because of COVID-19. But you must meet certain criteria to be eligible – described here.
The amount involved is paid at a flat rate of $585.80 to a person working 20 hours or more per week and $350.00 to a person working less than 20 hours per week. That is a payment of $7,029.60 for a full time employee and $4,200 for a part time employee.
Criteria to apply?
First, check 2019 revenue against 2020 revenue. Has there been a 30% actual or predicted decline? If so, then you need to confirm:
– the decline is due to the impact of COVID19;
– you will make best efforts to retain staff and pay them (at least 80% of their usual pay). This should be over the – 12 weeks subsidy period;
– you have taken active steps to mitigate lost revenue eg consulting with your bank or advisors; and
– Staff provide consent for details (names, contacts, IRD numbers) to be provided to MSD.
It is worth emphasising that a predicted drop of income will suffice, so employers should put together a list of factors supporting a predicted drop. That could include the obvious, such as staff not being able to work at all but also, where staff can work remotely, not all staff being able to work for 8 hours a day due to technical constraints or clients being in non essential industries.
Other steps to take
We suggest that you document last years revenue vs this year. If you’ve existed for less than a year choose a reasonable month last year to compare with. MSD have noted that they have power to investigate later and it seems likely that some will abuse the system – so best to document both what revenue was and is predicted to be, as well as a list of what steps were taken to mitigate impact.
This article is not a subsitute for legal advice and you should contact your lawyer about your specific situation. If you require any assistance with this, please feel free to contact Hannah Carey – firstname.lastname@example.org or Steven Moe – email@example.com at Parry Field Lawyers.