Wage Subsidy – August 2021: employers take note of a more comprehensive declaration
Once again the New Zealand government is supporting employers through lock down with a variety of financial subsidies and support on offer.
Applications for the Wage Subsidy are now open, at this stage for a limited period of two weeks.
The Wage Subsidy is available to employers who have experiences, or predict they will experience, a 40% decline in revenue over a two week period, as compared to a typical 14-day consecutive period in the six weeks immediately prior to the move to Alert Level 4. For a comprehensive summary of the Wage Subsidy and eligibility requirements, please see our earlier article “COVID-19 financial subsidies and support“.
An important point for employers to note is that the declaration, which the Ministry of Social Development (MSD) require for every Wage Subsidy application, contains more comprehensive terms as compared to the 2020 declaration. Key changes to note are as follows:
- The calculation of revenue for either of the 14-day periods cannot include any payments received by way of a COVID-19 financial assistance scheme (i.e. Wage Subsidy, Short-term Absence Payment, Leave Support etc (COVID-19 Support Payments)).
- Evidence must be prepared and retained that demonstrates:
- how the decline in revenue was attributable to the move to Alert Level 4;
- the active steps that the employer made, before making the declaration, to mitigate the impact of moving to Alert Level 4; and
- at the time of making the application, the employer was not receiving any other COVID-19 Support Payments.
- Employers acknowledge that receipt of the subsidy does not override existing obligations not only under the Employment Relations Act 2000, but also under the Minimum Wage Act 1983, Holidays Act 2003 and Health and Safety at Work Act 2015 (though note this is not an exhaustive list).
- Employers must inform the employees named in the Wage Subsidy application of the outcome of the application, and the conditions that apply to the receipt of the subsidy.
- Information provided to MSD under a Wage Subsidy application can also be used to make decisions, review and/or audit the employer’s applications for other COVID-19 Support Payments.
- Employers agree to repay the subsidy, or part of the subsidy, if they predicted a 40% decline in revenue, however that revenue decline did not eventuate. Employer’s also acknowledge that, in these circumstances, it may be subject to civil proceedings to recover the amount it was not entitled to, including possible prosecution under the Crimes Act 1961.
- An “employee” includes a sole-trader or self-employed person that does not employ employees.
- Businesses which are seasonal in nature may use a 14-day comparative period in 2020 or 2019.
We recommend all employers review the declaration thoroughly prior to applying for the Wage Subsidy.
Want to know more?
If you have any questions about the Wage Subsidy declaration, or any other COVID-19 financial assistance payments, please contact our specialist Employment Team.
View the PDF: here