Govt clarifies wage subsidy rule for part-time workers

30th March 2020 By Staff Reporter | news@tourismticker.com | @tourismticker

Employers will not need to pass on the whole $350 wage subsidy for part-time workers if they are usually paid less than that amount.

Finance minister Grant Robertson clarified the position over the weekend after announcing a number of changes to the Government’s wage subsidy scheme on Friday.

One of the changes announced on Friday was the requirement that employers make best endeavours to pay employees 80% of their wages but, if not, the entire wage subsidy must be passed to the worker.

“We still want employers to use their best endeavours to pay employees 80% of their normal salaries,” said Robertson.

“Where this is not possible, we want the value of the subsidy to be passed on. But to be absolutely clear if a person’s income is normally less than the subsidy they can be paid their normal salary.

“This is particularly an issue for part-time employees some of whom normally earn less than the $350 per week. We urge employers to use normal hours in the period before Covid-19 to assess the amount to be paid.”

The wage subsidy scheme provides employers with $585 for fulltime workers and $350 for part-time.

“This scheme is a high trust system in order to ensure that money reaches workers and businesses as soon as possible.  We urge employers to use the money provided by the scheme for the purpose it was intended, to support the wages of their employees,” said Robertson.

Two other changes announced on Friday included:

• The current sick leave scheme is being folded into the wage subsidy initiative to prevent double-dipping. The Government is looking at a sick leave scheme for essential workers.
• Employers are now required to keep their employees on for the whole period of the 12-week subsidy.

The changes applied from 4pm on Friday 27 March.

Robertson said the scheme had as at Friday paid out $2.7bn and its estimated cost was now $8bn-$12bn.