COVID-19: Financial support for businesses

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We have all been in Level 4 lockdown before – but given the Delta strain is a ‘game changer’, now is a good time to be aware of the support in place for businesses who may be financially impacted.

The Government will roll out the Wage Subsidy again, which businesses can apply for from Friday 20 August. Wage Subsidy rates have increased in response to higher wage costs since the subsidy was first introduced in March 2020 – now, businesses will be eligible for $600 per week for full time employees, and $359 per week for part time employees (previously, $585 and $350 respectively). Payment to eligible businesses is set to be provided in a two-week lump sum. The eligibility requirements remain the same, being an anticipated 40 per cent loss of revenue due to Alert Level 4. Subsidy funds should go directly to payment of employees’ wages.

The COVID-19 Resurgence Support scheme, which was introduced as a response to Wellington’s recent COVID-19 scare, will also be available for businesses. In contrast to the wage subsidy, this payment does not need to go directly to employee costs, and can be used for other fixed costs incurred by businesses. This scheme will provide up to $1,500 for the business plus an additional $400 per employee (up to a maximum of 50 employees, or $21,500). To be eligible, businesses need to have experienced a 30 per cent drop in revenue (or a 30 per cent decline in capital raising ability) over a seven-day period due to the alert level, meaning it is likely that applications for this support will be open around Wednesday 25 August 2021.

Other options available to employers include the Short-term Absence Payment and the Leave Support Scheme.

The Short-term Absence Payment provides a one-off $350 payment for employees who would be in the workplace (currently, only essential services) but are waiting for a COVID-19 test result and cannot work from home. This payment is not available if a business is receiving payments under the Wage Subsidy or Leave Support Scheme for this employee.

The Leave Support Scheme provides for employees who would be working (i.e. essential workers) who are required to self-isolate and cannot work from home. A flat rate of $585.80 per week for full-time workers (20+ hours/week) and $350 a week for part-time workers (less than 20 hours/week) is paid. Again, this is only available if the business is not already receiving support payments for this employee.

Employers and employees alike should be reminded that they are all subject to the usual employment obligations – dealing with each other in good faith, being open and communicative and ensuring health and safety while working. This can be difficult to maintain with normal routines and practices out the window – and varying abilities to continue operations.

Please contact a member of our employment law team for further information.

Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose. While we make every effort to ensure the accuracy of the information contained in this article, this is a rapidly changing environment and the information will be subject to change.

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