Blog · Payroll & Finance
COVID-19 Payroll Information
March 25, 2020
Because the situation is changing we’ll keep updating this page as information comes in.
Last updated: 05:00pm, 31 March, 2020
The New Zealand government has announced a wide ranging support package for Kiwis affected by the COVID-19 pandemic, including a wage subsidy.
The goal of the support package is to help businesses retain their most important asset - their employees. We have taken time to analyse and understand the options put in place and provide the following information based on our working understanding.
If you need additional advice about how to pay your employees right during the COVID-19 pandemic, please contact our support teams.
COVID-19 Wage Subsidy
The Wage Subsidy payment is a lump sum payment made to the employer and in receiving that subsidy the employer gives a commitment to continue to pay the employees a minimum of 80% of their normal pay.
Although the Wage Subsidy is for wages only, it is not necessary for it to be shown as a separate item on the payslip. You should continue to pay the employee the regular hours or salary gross earnings pay items. These items will be taxed as normal.
For more information about Wage Subsidy payments in FlexiTime and PayHero please refer to the following articles.
Can I temporarily close down my business?
An employer may only have one close down in any 12 month period, however, the employer and employee may agree to have a close down and discontinue the work of an employee at other times and agree on the arrangements that will apply during that time.
If the close down is not by agreement and is the only close down in a 12 month period, the employer must give the employee 14 days notice of the close down. The employer may require that the employee take annual leave during the period of the close down.
For information on processing close down periods please see the following articles.
How will my employee’s leave balances be affected?
If the employee’s weekly pay decreases from what it was before COVID-19 then this will decrease the employee’s average and ordinary weekly rates.
We recommend setting the employee normal hours per week or work pattern for the employee to ensure they maintain their leave entitlements during this period. The hours should be set based on the employment agreement or in discussion and agreement with the employee.
Do I have to pay my employees?
If the employee is working from home you have to pay them as normal.
If they are not able to work from home then it depends on the employment agreement you have with the employee and whether you have a Business Interruption (Force Majeure) clause in the agreement.
If you do have this kind of clause you may be able to require the employee to take annual leave or unpaid leave during the time they are not working. We recommend that you refer to your individual employment agreements for whether this will apply.
If you are receiving the Wage Subsidy then you have given a commitment to continue to pay them a minimum of 80% of their normal pay. There isn’t a clear definition of what normal pay is in the subsidy information. The normal pay will either be defined in the employment agreement or must be negotiated in good faith with the employee. The normal pay should be in regard to the period prior to COVID-19 and you can view historical pay information for the employee under the pay history tab on the employee record in PayHero or FlexiTime Payroll.
What can FlexiTime do to help?
For customers receiving the Wage Subsidy, FlexiTime is offering our support by providing a subscription fee holiday during the 4 week lockdown period.
If you need additional advice about how to pay your staff during the COVID-19 pandemic, please contact our support teams.
This information has been provided by the FlexiTime team to help Kiwi employers during the COVID-19 pandemic. Because this is still a rapidly changing situation, the information provided is subject to change.
If in doubt, please talk to your accountant, HR advisor or an employment lawyer for further advice.