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This note sets out some high-level guidance on the most common questions our clients are asking in relation to the impact of COVID-19 on their businesses and its people, and summarises the information currently available for Māori in particular.
Support for Māori communities and businesses
The Government has developed a plan to support Māori communities and businesses in the face of COVID-19. This includes a whole of government approach to providing health, social and economic support tailored to meet the specific needs of Māori.
This includes:
- a Whānau Māori Community and Mārae package reprioritising $10 million from the Māori Development vote to support community outreach. This includes steps taken by Te Puni Kokiri to support whānau, hapū and iwi with the tools, resources, infrastructure and technology required to support a targeted response.
- Māori Health and Whānau Ora response with $30 million targeted directly to Māori Health services and an extra $15 million to Whānau Ora commissioning agencies to ensure that they can reach into communities and help those most vulnerable.
- Supporting Māori Businesses and engaging with Māori with $1 million of funding to enable a needs assessment for Māori businesses, and $470,000 to Te Arawhiti to engage and work with iwi on their COVID-19 pandemic response plans, essentially empowering iwi so they can help more of their own whanau and communities.
Te Rōpū Whakakaupapa Urutā
Leading Māori health professionals have also come together to launch Te Rōpū Whakakaupapa Urutā, a website providing information and resources for whānau Māori and iwi to reduce the risk of COVID-19.
Hui
The Government had previously issued advice relating to Tikanga Māori and gatherings, including tangihanga, under Alert Level 3 and 4. Many mārae, hapū and iwi had already taken steps to implement various restrictions to reduce the risk of exposure to COVID-19. To slow the spread of COVID-19, the Government has declared that gatherings of any size in Aotearoa New Zealand are cancelled and public venues are closed. The advice provided by the Ministry of Health directs:
- All indoor and outdoor events cannot proceed.
- This does not include workplaces of people undertaking essential businesses.
- All mass gatherings or hui of any size including family and social gatherings such as birthdays, funerals, traditional tangihanga or weddings cannot proceed.
- You are asked to only spend time with those who you are in self-isolation with, and keep your distance from all others at all times.
COVID-19 – What employers need to know
The global pandemic COVID-19 has thrown up some unprecedented challenges to the workplace as we know it. By its nature, the virus itself (and the measures to contain it) affect the people who run our businesses. As the country heads into lock down, most businesses will be suffering losses and looking into temporary or longer-lasting options.
What help is available from the Government?
Wage Subsidy
The Government has put together a COVID-19 Wage Subsidy for employers in all regions.
It’s to support your business if you’re impacted by COVID and face laying off staff or reducing their hours because of COVID-19.
Some changes have been made to the scheme since it was first announced, including folding in the previous sick leave scheme into the Wage Subsidy scheme to prevent double-dipping. The original sick leave scheme was designed when few people were in self-isolation, and it is no longer fit for purpose (however, applications for the COVID-19 Leave Payment submitted before 27 March will continue to be processed and paid). The Government is still working on arrangements for those in essential work who require sick leave due to COVID-19.
Who can get it
If you’re an employer, contractor, sole trader or self-employed, you may qualify to get the COVID-19 wage subsidy.
To qualify:
- your business must be registered and operating in New Zealand
- your employees must be legally working in New Zealand
- the business must have experienced a minimum 30% decline in actual or predicted revenue over the period of a month when compared with the same month last year, and that decline is related to COVID-19
- your business must have taken active steps to mitigate the impact of COVID-19
- you must undertake to keep employees in employment for the period of the subsidy
- you must undertake best endeavours to pay employees 80% of their pre-COVID income. Where
that is not possible – in particular where a business has no activity whatsoever due to the shutdown and workers are not working any hours – you must pass on at least the whole value of the wage subsidy to each affected worker.
How much you can get
The COVID-19 Wage Subsidy will be paid at a flat rate of:
- $585.80 for people working 20 hours or more per week
- $350.00 for people working less than 20 hours per week.
The subsidy is paid as a lump sum to the employer and covers 12 weeks per employee.
This subsidy is for wages only. It is to help you keep your staff employed while you consider changes that may be needed while the disruption continues, and to ensure the future viability of your business.
At this stage, businesses can only get this subsidy once. There is no longer a cap on the total amount a business can claim. You can find more information about the wage subsidy and how to apply here.
Employment law – what you need to know now
Balancing Health and Safety with a staff member’s right to work
All employers owe duties to address risks to the health and safety of their staff, customers and others who interact with the business. A good barometer for what is fair and reasonable is the current best-practice advice from the Government.
Many businesses are now deemed non-essential and therefore are only allowed to keep working if staff can work from home. For essential businesses, the Ministry of Health has set out broad guidelines about:
- things to do in the office (cleaning, disinfecting, remote working, physical distancing etc), and
- when staff should self-isolate.
Currently the guidance on self-isolation relates to those who have travelled internationally or who have been in contact with someone who has COVID-19. In those circumstances an employer may keep a staff member out of the workplace for the 14 days recommended.
Staff in a situation not addressed by the Ministry’s guidelines e.g. showing undiagnosed symptoms, having a family member in self-isolation or others, will need to be considered on a case-by-case basis. While you might consider that asking them to stay away might be the right thing for your business, if it is not supported by a good reason the decision may not be seen as fair and reasonable. As with all employment relationships – providing information to staff is an important way to avoid surprises and subsequent negative reactions. Keep everyone in the loop about your plans and how you propose to deal with the risk to the workplace.
What about payment?
If an employee is actually sick (with COVID-19 or otherwise) they will be entitled to sick leave. Where paid sick leave is exhausted, the employer can choose a range of discretionary other options or look at unpaid leave.
If you are keeping an employee out of the business for precautionary reasons (rather than under those prescribed by the Government) then you may well be obliged to pay the employee. If an employee is ready and willing to work, and you are preventing them from doing that, then the starting position is that they are to be paid.
Working remotely is a good option if it suits your business, allowing the business to still benefit while you pay the staff member that cannot come into the workplace. You can also ask if the employee will agree to take sick leave, annual leave, or unpaid leave.
However, it is important to note that they cannot be forced to agree to that.
What about more serious / permanent options?
Some employment agreements contain “force majeure” clauses which allow for certain steps in the event of outside forces making the agreement impossible to perform. These are usually used in the event of natural disasters and the like, but a global pandemic may well fall within the definition in your agreements.
If there is no force majeure clause, you could look at restructuring your business. That might mean permanent redundancy for staff based on the current uncertainty / prediction of a long recovery period. Alternatively, you could carry out a process to change the terms of their agreement on a temporary basis or to include the ability to suspend. As with any restructuring, whether this is an option will depend on your specific business and how COVID-19 affects you.
Other financial assistance available (for employers and employees)
If you can provide evidence that you’re suffering significant financial hardship, you may be able to withdraw some of your KiwiSaver savings.
Significant financial hardship includes if you’re:
- unable to meet minimum living expenses
- unable to meet mortgage repayments on the home you live in, resulting in your mortgage provider enforcing the mortgage on your property
- modifying your home to meet special needs because of you or a dependent family member having a disability
- paying for medical treatment if you or a dependent family member:
- becomes ill
- has an injury, or
- requires palliative care
- suffering from a serious illness
- incurring funeral costs if a dependent family member dies.
You may be able to withdraw the current value of your contributions and your employer’s contributions. You won’t be able to withdraw any government contributions. The amount you can withdraw may also be limited to a specified amount.
You can find more information about accessing your KiwiSaver early here.
There has also been some media reporting that the Ministry of Business, Innovation and Employment is investigating ways to make the application process easier during the level 4 alert lock down.
How can we help?
WRMK Lawyers has Northland’s largest team of employment law specialists and a group of lawyers dedicated to meeting the unique needs of our Māori clientele. If you need some help or guidance in this difficult time, please give us a call or contact your usual WRMK lawyer for advice.
Nāu te rourou, nāku te rourou, ka ora ai te iwi!
WRMK Lawyers takes all reasonable care to make sure that the information in this article is up-to-date and accurate at today’s date. It is necessarily general information and not intended as legal advice to be relied upon.