Today we address concerns for Employers regarding paying Self Isolating Employees and payroll payments for upcoming Public Holidays.
Our aim is to support Employers with practical legally compliant solutions through this critical period of COVID-19 lockdown with practical, up to date information and as we navigate into an uncertain business future.
Read on to find out what you need to know.
1. Payments to Non-Working Employees within Essential Businesses
To date essential businesses who are continuing to operate have struggled to access the Wage Subsidy Scheme as they do not meet the minimum 30% actual or predicted decline in revenue. Prior to 4.00pm on Friday 27th March these businesses were however able to access a wage subsidy payment – known as Self-Isolation Leave for individuals who meet the required health criteria. This being; recently returned from overseas, over 70 years old or have underlying health issues that meant continuing to attend work presented an untenable health risk for them. Some additional employees also qualified for this as being the carer of such people. These groups of workers have been defined as being ‘vulnerable’.
The Self-Isolation Leave payment was $585.80 per week with the employer being required to pass the full value of the payment onto the effected employee. Eligibility was in two (2) weekly periods with a new application having to be submitted for renewal of a further two (2) weeks.
Unfortunately, due to “double dipping” by some employers this scheme was “folded” into the main Wage Subsidy Scheme as of 4.00pm Friday 27 March meaning that employees within essential industries who met the health criteria were no longer eligible for payment if their employer could not demonstrate an actual or predicted 30% decline in revenue.
This immediately removed the payment eligibility for ‘vulnerable’ workers, even if they had received this for the initial two-week period.
Yesterday the Government announced that ‘vulnerable’ workers within essential industries will now be able to access the wage subsidy payment of $585.80 effective as of Monday 6 April 2020.
This is great news for both the employees and the employers however the eligibility criteria for this is still unknown with the Government website still showing that essential businesses will need to meet the 30% decline test. We are certain that this will be updated within the next 24 hours with this eligibility criteria being softened.
As soon as the full details of this amended wage subsidy scheme are released, we will provide a further update.
2. Payment of Public Holidays during Lockdown
Two (2) Public Holidays fall during the current lockdown period – Good Friday (10th April) and Easter Monday (13th April). Easter Sunday (12th) is not a public holiday and therefore anyone working on that day will only be entitled to usual Sunday payment provisions as per their employment agreement.
How do we pay employees for working on the Public Holidays?
The provisions of The Holidays Act 2003 continue to apply in full during the lockdown period. This means:
- If the Employee is required to physically come to work on the Public Holiday and this is an ordinary day of work for them (they usually work this day each week) they will be entitled to time and one half (T1.5) for each hour worked, and also a full day in lieu (alternative day) to be taken at a later date.
- Any casual employee required to work on the Public Holiday will be entitled to payment at T1.5 but is not entitled to a paid alternative day.
What about employees who are working from home?
- As these employees have a high level of discretion as to when they might undertake their required work, such employees should be advised by their employers that they are not to complete any work on the public holiday without prior authorisation.
This will prevent claims for T1.5 of an alternative day being made.
- However, if the day the public holiday falls on a day that is a ordinary working day for the employee the employee will be entitled to receive payment for a non-worked public holiday to be paid at their relative daily rate of pay.
- For such employees, when processing the payroll for these weeks, you will need to clearly show that the public holiday has been taken (as non-worked) and that the employee has been paid their relative daily rate of pay. This is required in case there are any challenges at a later date regarding whether the employee was correctly paid for the public holiday or not.
What do I pay the employee if I am paying them a reduced wage / salary rate during the lockdown period?
You have a few options here, with both being compliant to The Holidays Act 2003 and the Wage Subsidy Scheme criteria:
Option 1: Currently only paying the full subsidy amount.
- Continue to pay the full subsidy ($585.80) and also pay the full relevant daily pay for the public holiday.
- Pay the relevant daily pay for the Public Holiday (showing this on the payslip) and make up the balance of the $585.80 as a separate taxable payment on the payslip.
Note: the payment from the Government is a contribution (subsidy) towards the ongoing payments to the employees with you able to use this to pay wages, annual leave, sick leave, public holidays or alternatives days as all are defined as “time worked”.
Option 2: Currently paying greater than the full subsidy amount (i.e up to 80%)
Pay the relevant daily pay for the Public Holiday (showing this on the payslip) and make up the balance to the agreed weekly wage/salary leave as a separate taxable payment on the payslip.
If you have any questions regarding these payments please feel free to given us a call on 07 838 0018 or drop us an email to firstname.lastname@example.org
As we continue to provide you with critical information for your business during this time of the COVID-19 lockdown, if you are unfamiliar with our business, please take the time to visit the rest of our website to see our other services that we can provide to you and your business.