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We are now two weeks into our Level 4 Lockdown and my impression is that businesses are starting to adjust to the ‘new normal’. However, issues still arise for which there seems to be some confusion. Two such issues are: 1. If we have reduced wages across the business, how do we pay for public holidays? 2. If we need to terminate the employment of an employee for whom we have applied for the wage subsidy, what do we do with that part of the subsidy which is unused?

Last week many employers will have terminated staff following the announcement of the Level 4 lockdown and for other employers they will still be contemplating the possibility of redundancy. However, the availability of the Government wage subsidy raises the question of whether any business should be making redundancies at the moment, or simply sitting things out to see what happens.

Further changes to the wage subsidy on Friday give greater clarity on the ‘best endeavours’ requirement to pay 80% and how the subsidy intersects with current legislation. Many employers will have acted quickly and decisively in the face of the lock-down, but the changes on Friday present a good opportunity to review past decisions and perhaps change course.

The requirement of businesses to top-up the wage subsidy to 80% of wages is causing problems for many businesses with high income employees because they are concerned about not having the funds to do so. Here is my view on it.

One of the options being considered by employers during the lockdown is to require employees to take annual leave. However, during a Government briefing yesterday, in response to a question from a reporter, the Minister responsible for MBIE appeared to express disapproval of this practice. So, let’s take a deep dive into this issue.

Since our Government has had to act quickly to ensure the containment of Covid 19 many issues are unclear and are being worked out as we speak. I have received a lot of questions about the subsidies being offered and other related issues, and whilst I don’t profess to have all the answers I am happy to share the guidance I have given to those who call in the hope it will assist thoughtful decision-making over the next days or weeks. I provide the caveat that, like many, I am working with the best information I have at hand and that the information available today may change tomorrow.