As the disruptions caused by the COVID-19 pandemic flow through New Zealand’s business community, exacerbating already shaky business confidence and sending many businesses into a tailspin, the NZ Government have stepped in with a massive $12.1b stimulus package to stave off the worst of the looming economic downturn, at least for a short while.
This is a welcome shot in the arm for most of our JOYN clients, one can only be impressed with the speed and decisiveness shown by Ardern’s Labour Government in these unprecedented times. In a bid to keep Kiwis in gainful employment and keep businesses afloat, NZ companies can now claim wage subsidies.
In order to qualify a business must be able to show:
- 30 per cent decline in revenue for any month between January and June 2020 compared to the same corresponding month in the year before (including projected revenue).
- That loss is attributable to the COVID-19 outbreak.
- Active steps have been taken to mitigate the impact of COVID-19 on your business activities (such as engaged with your bank, Chamber of Commerce, industry association or the Regional Business Partner programme)
- You will, using best endeavours, retain the employees named in your application in employment on at least 80 percent of their regular income for the period of the subsidy.
You can apply for employer support here. Make note that the subsidy is being administered under a high trust model and employers may not be asked for verification before the subsidy is approved (or they may be contacted by phone to answer some validation questions). However MSD will have the ability to check applications and verify information at a later date. Where false or misleading information has been provided, employers can be subject to fraud investigation.
The wage subsidies will amount to:
- $585 per week for full time staff and $350 for part time (less than 20 hours per week)
- Payments are capped at $150,000 per business and paid in a lump sum (processing times currently aiming for 5 business days dependent on claim volumes)
- Available immediately for 12 weeks, paid in a lump sum (eg. $7,020 for a full-time employee)
Helping you Manage the People Side
At JOYN we support our clients with both their Recruitment and HR needs. Whilst we hope the above will help many to continue recruiting and retaining good people, we are also keen to support our clients on the HR front when necessary too.
One of our senior HR Consultants, Phyllis Gardyne, has kindly shared the below advice for all JOYN clients, including some useful documents and templates for you to use should you need to formalise changes to working arrangements with your staff:
We are all treading through new territory as we deal with implications of the global COVID-19 spread. This is a new virus which is why some drastic measures are needed – no health system can be equipped for a rare event such as the global spread of a new virus. People in our governments and health systems are working hard to minimise the impact, timeframes and losses from this pandemic. As business owners and managers, we will have to take a range of actions to get ourselves, our businesses and our staff through to the recovery phase.
Many businesses in the travel industry are already reluctantly in a position where they need to reduce staff numbers, and this happened quickly. Other businesses are facing staff who are uncertain, anxious or need to have time off. As the virus spreads through our communities, we will face increasing numbers of absences and will need to plan for this. We may eventually find ourselves in a similar position as those in the travel industry do currently.
At this point, I find myself wondering if there is any good news. And as always, the answer is yes. We can take this as an opportunity to pay attention to the people around us, not just to check if they have a tell-tale cough 😊, but to see if they are doing OK. We can look out for each other and show our compassion for those who are struggling. And importantly, we can make sure that we take good care of ourselves so we can keep taking good care of others.
As business owners and managers, you will be reviewing the options for your business in relation to government assistance, bank flexibility and advice from your accountant or business advisor. At some point you may need practical support with the HR issues you are facing.
In the early stages we recommend that you provide clear communication where you acknowledge fears, let staff know what you are doing to keep them safe, set boundaries on unacceptable responses and make sure staff know how time off will be managed (download Staff communication early doc here).
If there is a need to restructure to reduce staff numbers, a reasonable process would be:
- Advise staff in a proposal that you believe you need to reduce staff numbers due to uncontrollable / external factors
- Present the proposal requesting their feedback / ideas within two days (shorter than normal due to extenuating circumstances)
- Make your decision about the reduction in staff numbers needed and let staff know your decision – staff will have roles disestablished and become redundant
- Ensure staff are referred to appropriate agencies for support
While sound advice is needed throughout the process, the document in this link (download Restructure Proposal Template) provides a template for starting the staff consultation process.
Given the wage subsidies mentioned earlier are offered to businesses who can use their best endeavours to retain staff on at least 80% of their current work hours, we also include a second restructure document that addresses reducing staff to 0.8 of FTE (download Restructure Proposal for 0.8 FTE hours here)
You may need to review hours or days worked. You may wonder how to deal with someone who has traveled while on leave or traveled for their work. You may need to activate ‘force majeure’ clauses in employment agreements, you may have other questions that are not ‘business as usual’. This is where an experienced HR consultant can help. Please Contact Us at JOYN for any additional support we may be able to offer.
Thanks to Phyllis for taking time out of her understandably hectic schedule to provide the above information and resources.
Keep safe and healthy and keep positive too, NZ business will no doubt rebound strongly in the near future.