COVID-19: Immigration update

Thursday, April 9, 2020

Does an employer have to pay the subsidy (and/or more) to an employee who is struck overseas? 

The COVID-19 pandemic has stranded tens of thousands of people, with border closures here in New Zealand and overseas.

The New Zealand border is closed to most travellers but New Zealand citizens and permanent resident visa holders can return. Residency holders who have not visited New Zealand yet (which ‘activates’ the visa) are excluded. Anyone returning from overseas must self-isolate for 14 days. Some employees of New Zealand businesses do remain stuck overseas, however. Are they entitled to be paid in these circumstances?

In general terms, the question of whether an employee is entitled to be paid wages turns on whether the employee is “ready, willing and able” to work, as this is the legal test which gives rise to an obligation to pay wages. Those who are stuck overseas, and cannot work remotely, are arguably not “ready, willing or able” to work, and may not be eligible to be paid wages.

Whether overseas employees are eligible for the Work and Income (WINZ) Wage Subsidy will depend on whether the subsidy eligibility criteria is met.

To be eligible for the wage subsidy, and assuming the employer meets the financial criteria i.e. has 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 has taken active steps to mitigate the impact of COVID-19), the individual will need to be employed by the business making the application and employed in New Zealand.

Once in receipt of the subsidy the employer will need to pass this on to the employee, regardless of whether they are stuck overseas or remain within their “bubble” in New Zealand. So yes, an employer will have to pay the wage subsidy to an employee who is stuck overseas and potentially more than this depending on the employee’s level of income. To this end, employers are required to use their best endeavours (sometimes the Government has used the term “best efforts”) to pay at least 80% of the employee’s ordinary wages and salary.

Summary:

  • There is no obligation on employers to apply for the WINZ wage subsidy, but any reduction of wages needs to be by consent between the parties.
  • Employees stuck overseas may be eligible to receive the wage subsidy if the eligibility criteria is met. They must be employees of the business making the application and employed in New Zealand.
  • If in receipt of the subsidy, an employer has to pass this on to the employee and potentially more than this depending on the employee’s level of income. Employers are required to use their best endeavours to pay at least 80% of the employee’s ordinary wages and salary.

COVID-19 – Effects of Epidemic Management Notice on Temporary Visa Holders

With the recent declaration of a State of National Emergency, the New Zealand Government has issued an Epidemic Management Notice in relation to immigration matters, the effect of which will come into force on Thursday 2 April 2020. The intention of the Epidemic Management Notice is to address the issues arising for temporary visa holders during this period as a result of the outbreak of COVID-19.

The release of the Epidemic Management Notice enables Immigration New Zealand to make changes to the application of the Immigration Act 2009 to provide comfort to temporary visa holders. Immigration New Zealand has announced that visitor, student or work visa holders with an expiry date of 1 April 2020 or earlier and who are unable to leave New Zealand must apply for a new visa online. An interim visa will be issued. As for those visitor, student or work visa holders with an expiry date of 2 April to 9 July 2020 and who are in New Zealand on 2 April 2020, their visas will be automatically extended to 25 September 2020.

Where a migrant is no longer employed in accordance with conditions on a work visa i.e. regarding any of employer, occupation and location conditions, where alternative employment has been obtained, either a variation of conditions or a new work visa should be applied for. Where alternative employment cannot be obtained and the migrant wishes to remain in New Zealand while seeking new employment or is unable to return to their home country for reasons such as border restrictions and/or limited commercial flights, consideration should be given to applying for a visitor visa.

Immigration New Zealand acknowledge it may be difficult to make an application to vary conditions on a work visa. The New Zealand offices of Immigration New Zealand are currently closed due the COVID-19 response and accordingly Immigration New Zealand are operating on limited capacity with the focus on the highest priority work in respect of the COVID-19 response. Further guidance is yet to be released on this issue, however, in the interim, we consider it prudent for employers and their potential employees to seek professional advice and representation as soon as possible in terms of applications for variations of conditions and/or new work visas, to streamline the application process and in particular, where employers are providing an ‘essential service’ and urgently require migrant labour to meet demand. 

The list of ‘essential services’ is constantly evolving and does currently include some accommodation, housing and food delivery options. It is clear that the provision of ‘essential services’ is of significant importance and therefore the ability of employers providing those services to retain the appropriate labour work force is likely to be a high priority for Immigration New Zealand. This is also relevant even when New Zealand, or particular regions within New Zealand, may move to Alert Level 3, as there is still likely to be some distinction between ‘essential services’ and ‘non essential services’. Another area of high priority for Immigration New Zealand may also be where occupations are on a skills shortage list.    

Effect of Epidemic Management Notice on the Social Security Act 2018

The Epidemic Management Notice allows the Ministry for Social Development to grant emergency benefits to people who would not otherwise be entitled to them. This includes temporary visa holders who lose their employments due to the outbreak of COVID-19. It also enables flexibility in relation to the payment, reinstatement, grant, increase, cancellation, suspension or variation of benefits.

Please feel free to contact our specialist immigration team and employment team to discuss any immigration questions you may have.

 

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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