COVID-19: Essential Workers Leave Support

The Government’s COVID-19 Essential Workers Leave Support scheme provides support to essential services to pay employees who can’t work due to COVID-19.

Eligibility

COVID-19 Essential Workers Leave Support is only available to essential services. Essential services are those that provide the ‘necessities of life’ and are listed on the Ministry of Business, Innovation and Employment’s website.

Essential service businesses can claim the support for essential service employees who:

  • are ‘high risk’ and should stay at home (as recommended by the Ministry of Health guidelines);
  • come into contact with someone who has COVID-19 and must self-isolate for 14 days (as required by Ministry of Health guidelines);
  • have tested positive for COVID-19 and are required to remain off work until they've been cleared from self-isolation by a health professional; or
  • have household members who are ‘high risk’ and should stay home to reduce the risk to them (as recommended by the Ministry of Health guidelines).

Before applying for COVID-19 Essential Workers Leave Support, the business must speak with their essential service employees about how the business can best support them. This may include using sick leave if the employee is sick with COVID-19 or other discretionary leave if the employee is not sick.

To be eligible to apply for COVID-19 Essential Workers Leave Support, the business must have either:

  • experienced at least a 30% decline in actual or predicted revenue over a one-month period when compared to the same month last year (or a reasonably equivalent month if the business has operated for less than one year), and that revenue loss is attributable to the COVID-19 outbreak; or
  • had its ability to support the employees ‘negatively impacted' by the COVID-19 public health restrictions.

Additionally, the business must not be currently receiving the COVID-19 Wage Subsidy or the COVID-19 Leave Payment (note that the COVID-19 Leave Payment is no longer available) for the employees named in the application.

Support available

COVID-19 Essential Workers Leave Support payments are the same as the Government’s Wage Subsidy payments – $585.80 for employees who work more than 20 hours per week (full-time rate) and $350.00 for employees who work less than 20 hours per week (part-time rate).

COVID-19 Essential Workers Leave Support is paid as a lump sum covering a period of four weeks. Businesses are able to apply for COVID-19 Essential Workers Leave Support multiple times for the same employee (i.e. in the last week of the four week period, the business can apply for the next four weeks).

Obligations to employees

While a business is receiving COVID-19 Essential Workers Leave Support, it must try its hardest to pay the employees at least 80% of their usual wages.

In addition, the COVID-19 Essential Workers Leave Support does not change a business’ obligations to their employees under employment-related legislation or the employees’ employment agreements. The business must declare that it will:

  • Use ‘best endeavours’ to pay at least 80% of each named employee's ordinary wages or salary. If that isn’t possible, the business will need to pay at least the support payment (i.e. the full-time rate or part-time rate). As with the Wage Subsidy, if the employee's usual wages are less than the support payment, the business must pay them their usual wages and any remaining payment should be used to pay other affected employees.
  • Retain the employees named in the business’ application as their employees for the period they receive the support in respect of those employees;
  • Not make any changes to the obligations under any employment agreement, including to rates of pay, hours of work and leave entitlement, without the written agreement of the relevant employee;
  • Not unlawfully compel or require any of the employees named in the business’ application to use their leave entitlements for the period they receive the subsidy in respect of those employees (note that employers can lawfully ask or direct employees to take leave entitlements in accordance with the Holidays Act 2003); and
  • Only use the support payment for the purposes of meeting the business’ named employees' ordinary wages and salary and the business’ obligations in relation to the support payment.

Businesses must also discuss the application with their employees and gain their consent to information sharing. We note that express ‘opt in’ consent may not be required (see Privacy Commissioner’s comments here).

How to apply

Applications for COVID-19 Essential Workers Leave Support are made online, here.  If you are a sole trader and are applying for yourself, you can apply here.

As part of the application, you must declare that the business meets the eligibility criteria for COVID-19 Essential Workers Leave Support. The declaration is available here.

What happens if things change?

The business must notify the Ministry of Social Development within five working days if anything changes that may affect its eligibility or entitlement to COVID-19 Essential Workers Leave Support, including if any of the employees named in the application end their employment relationship with the business.

The business must repay the support payment or any part of the support payment if it:

  • fails to meet any of COVID-19 Essential Workers Leave Support obligations;
  • is not or ceases to be eligible COVID-19 Essential Workers Leave Support;
  • provides false or misleading information in its application; or
  • receives insurance such as business interruption insurance for any costs covered by COVID-19 Essential Workers Leave Support.

The business may be subject to civil or criminal proceedings if it does not comply with its obligations under the declaration.

Further information

Who can help