Resurgence Wage Subsidy while Auckland at Level 3

Last Friday, the New Zealand government announced that Auckland will stay in COVID-19 Alert Level 3 for a further 12 days in response to the most recent outbreak. The remainder of the country remains in Alert Level 2. The nature of Level 3 means that the majority of businesses can operate only in a contactless way. We have set out what Level 3 looks like for employers here. For those in Level 2, social distancing requirements will mean limited customer numbers, as well as a significant reduction in revenue from Aucklanders travelling domestically.

Minister of Finance, Grant Robertson, has confirmed that the wage subsidy scheme is being extended for the time that Auckland remains in COVID-19 Alert Level 3. Applications for what is being termed the Resurgence Wage Subsidy will be open from Friday 21 August for any business, self-employed individual or independent contractor. The Resurgence Wage Subsidy will apply nationwide to reflect that Auckland represents approximately 40% of New Zealand’s GDP, and is expected to cover around 470,000 jobs. The subsidy rate will remain the same, at NZD585.80 for full time workers and NZD350 for part time workers per week.

The threshold for claims is that a business must (a) have had, or predict that it will have, a revenue drop due to COVID-19 of at least 40%, and (b) that this revenue drop applies for any consecutive period of at least 14 days within 12 August 2020 and 10 September 2020. To claim the previous extension, employers needed to show a 40% decline in revenue, that they had mitigated the financial impact of COVID-19 and were under an obligation to retain the employees applied for. Much like the last subsidy, if claiming the Resurgence Subsidy employers should try their hardest to pay employees at least 80% of their wages, using the subsidy to form part of this.

In a further move, from Friday 21 August 2020 the COVID-19 Leave Support Scheme will be adjusted. From this date, the revenue drop and “negatively impacted” test has been removed. This is intended to make it easier for New Zealanders to take time off work to get tested or self-isolate if necessary. The employee must have tested positive, have come into contact with someone who has COVID-19, or be at higher risk (or have family members who are at higher risk) if they get COVID-19.