Applications are now open for the two-week Wage Subsidy March 2021 (“the Wage Subsidy”).
The Wage Subsidy is to assist employers in making wage payments to their staff and to protect jobs in businesses affected by the rise in COVID-19 alert levels.
Is my business eligible for the Wage Subsidy?
To be eligible, your business must:
- have had, or expect to have, a decline in revenue of at least 40 per cent over a consecutive 14-day period between 28 February 2021 and 21 March 2021 (“the revenue test period”) compared to a typical 14-day period between 4 January 2021 and 14 February 2021 (“the default comparator period”);
- demonstrate that this decline in revenue is attributable to the effect of the move to Alert Level 3 on 28 February 2021; and
- be registered and operating in New Zealand.
If your business has highly seasonal revenue, you must experience or expect a decrease in revenue of at least 40 per cent over the revenue test period when compared to the same 14 consecutive days in 2020 or 2019, provided you can demonstrate that the seasonal nature of your business makes it harder to meet the 40 per cent revenue decline using the default comparator period than if your business was not of a seasonal nature.
Additionally, each of the employees named in your application must be legally employed by your business, employed in New Zealand, and have not been given notice of redundancy as at the date of your application.
The Wage Subsidy is available to any business across New Zealand who meet the criteria above. It is not restricted to businesses based in the Auckland region.
Applications may be lodged online from 1pm on Thursday 4 March 2021 and close at 11.59pm on Sunday 21 March 2021. Employers applying for the Wage Subsidy can use this eligibility checklist.
What can I receive under the Wage Subsidy?
The rates for the Wage Subsidy are the same as the rates under previous wage subsidy schemes, being:
- $585.80 gross per week for each full-time employee retained (being employees working 20 hours or more per week); and
- $350 gross per week for each part-time employee retained (being employees working less than 20 hours per week).
The Wage Subsidy will be paid for two weeks, and payments will begin on Monday, 8 March 2021.
You cannot apply for the Wage Subsidy for an employee while receiving any other COVID-related support for that employee (e.g. the Leave Support Scheme or Short-Term Absence Payment).
You cannot obtain the Wage Subsidy for an employee that is currently on ACC earnings-related compensation. However, you can apply for them if they have returned to work and are no longer receiving ACC.
You also cannot receive the Wage Subsidy more than once for the same employee. However, should Alert Level 3 extend past 21 March 2021 anywhere in the country, the Wage Subsidy may be extended for a further two weeks.
What are my obligations under the Wage Subsidy?
In receiving the Wage Subsidy, you must:
- comply with your existing obligations under employment law;
- retain the employees named in the application for the period that you receive the Wage Subsidy;
- use the subsidy to pay the ordinary wages and salary of the named employees for the period that you receive the Wage Subsidy;
- use best endeavours to pay at least 80 per cent of each named employee’s ordinary wages or salary for the duration of the Wage Subsidy;
- pass on at least the full amount of the Wage Subsidy to each named employee, unless the employee’s ordinary wages or salary as at 28 February 2021 is less than the Wage Subsidy, in which case the employee must be paid their ordinary wages or salary; and
- repay any amount of the Wage Subsidy that is not required for these purposes and that cannot be used to support paying and retaining other affected staff.
For the purposes of the Wage Subsidy, “ordinary wages or salary” means the ordinary wages or salary as specified in the employee’s employment agreement or in accordance with the relevant statutory obligations as at the date you apply for the Wage Subsidy.
You are also required to prepare and retain evidence to support your application, such as records that demonstrate:
- how the decline in your revenue was attributable to the move to Alert Level 3 on 28 February 2021;
- that before you made your application, you had taken active steps to mitigate the impact of the move to Alert Level 3 on 28 February 2021 on your business activities (such as making an insurance claim, drawing on cash reserves etc.); and
- that you are not receiving a payment under this Wage Subsidy scheme, the Short-Term Absence Payment scheme, or the Leave Support scheme in respect of any of the employees named in your application.
In applying for the Wage Subsidy, you must also advise your employees that they have the right to request all information held about them under the Privacy Act, and that they can utilise WINZ’s online Wage Subsidy Employer Search.
When would I need to repay the Wage Subsidy?
You will be required to repay all or part of the Wage Subsidy if you:
- fail to meet any of the obligations about how you must use the Wage Subsidy;
- were not or cease being eligible for all or part of the Wage Subsidy;
- provide false or misleading information in your application; or
- receive insurance such as business interruption for any costs covered by the Wage Subsidy.
You will also be required to pay back any surplus Wage Subsidy payments that are not required to meet your obligations under the Wage Subsidy and that cannot be used to support paying and retaining other affected staff.
If you have any questions about the Wage Subsidy or other COVID-19 support schemes, please feel free to contact us on 0800 339 002.
