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COVID-19 Wage Subsidy and NZ Employment Law

The subsidy sounds pretty simple but we are seeing a number of organisations getting caught out by the lack of policy in the wage subsidy. Let’s say you have been paying your employees the wage subsidy without a top up during lockdown. They were working, but from home and not able to work a full 40 hour week. No problem there, providing you had an agreement with your employees which was limited in time. The subsidy runs for 12 weeks, if your employees are back at work full-time, you must now top up the subsidy to their pre-Covid salary or reduce their hours and ensure you are paying them fairly, providing you have followed good process and consulted with them.

As we said, it all sounds simple enough so why are so many of us getting it wrong. Two reasons, instruction and economic survival.

When the Government launched the support for employees, we all agreed, it was a much needed initiative, the challenge came when the ‘instruction’ was to do your best to pay employees 80% of their regular wage. The piece that was missing was that any alterations to a wage or salary, even if it is temporary or caused by a global pandemic, must follow due process and work within the regulations of NZ Employment law.

NZ Employment Law stands above Covid-19

Going forward, our clear message is that NZ Employment Law must stand in everything you do. If you are changing the employment conditions for staff (whether permanent or temporary) we recommend that you go through a formal restructure communication process. This requires you to propose / consult / decide / communicate / document variations to employment agreements. This is outlined in our templates under Change Management.

This also means that anything in employment agreements and policies / practices must be honoured. For instance, if there is a significant change that staff do not agree to then any redundancy entitlements would be activated.

What if we are facing a restructure / redundancy process

Our HRNow app users, have access under the Change Management section to a template summary of the restructure process. We can also provide a restructure communication template as needed. In summary, you need to:

  • Propose
  • Consult
  • Consider & Decide
  • Communicate Decision
  • Document new conditions for everyone whose conditions have changed (Employment Agreement Variation)

Staff who do not sign and agree to new conditions will have their employment terminated based on redundancy.

If there was ever a time when you needed HR support, it’s NOW.

Whether you are looking to outsource your HR needs, a one off contract or support with COVID-19 and NZ Employment Law, the HRNow app and consultancy provides you with highly qualified, knowledgeable HR experts who have a deep understanding of the complexity of employment law, all in one easy solution.

If you are unsure, please, reach out. A quick conversation could save you a lot of time and avoid litigation.

If you would like an app tutorial or more information on HRNow email:


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