COVID-19 Wage Subsidy August 2021

Applications are now open for the Wage Subsidy August 2021.
 
The Wage Subsidy August 2021 declaration was released this morning (20 August 2021) by Work and Income New Zealand.  Whilst there are not many changes when compared to previous declarations, we set out our initial observations below. 

Our advice to employers is to not hastily apply for this wage subsidy, as the date of application is key:

  • Eligibility assessed over 14-consecutive days.  Businesses must have had, or are predicting to have, a decline in revenue of at least 40% over the period 17 August 2021 to 30 August 2021 (inclusive), compared to a 14-day consecutive period of revenue in the six weeks immediately prior to 17 August 2021.  Or, for highly seasonal revenue, the comparator is the same 14 consecutive days in 2020 or 2019.  Accordingly, some businesses may need to wait to see whether they are going to meet this threshold. 
  • Entitlements assessed at the date of application. Employers remain responsible for paying the ordinary wages and salary of the named employees, using their best endeavours to top this up to at least 80%.  The ordinary wages or salary of an employee will be assessed at the application date.  Accordingly, if employers are considering proposing changes (temporary or permanent) to hours of work, for example, this could be done in advance of the application.

By not rushing to apply for this wage subsidy, employers can assess the revenue test period and use this time to consider their workforce needs, including whether restructuring or temporary changes to employees’ hours are required to get their businesses through the ongoing uncertainty.  Any such changes can be made, by way of consultation in accordance with good faith obligations, in advance of the application.    
 
If you need to make changes to employee entitlements after applying for the subsidy, you will need the employee’s written agreement to those changes.  This would add a layer of complexity to the consultation process.  If an employee refuses to give their written agreement to these changes, their employers may need to consider their redundancy, which may trigger the obligation to pay back the wage subsidy for that employee.
 
If you have any employment related questions regarding the impact of COVID-19 on the workplace, you can see further information at our website www.edwardslaw.co.nz or contact our offices on:
 
              Auckland: 09 953 9757
               Hamilton: 07 981 3140
               Tauranga: 07 987 0914

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