The Government has established a new subsidy to make it easier for workers in essential services during the COVID-19 lockdown, to take leave.

What is it?

The subsidy is designed to support businesses that are providing essential services during the lockdown and their employees.

The Government acknowledges that even businesses which are still operating may be suffering losses, and also that there is particular strain on their employees to work with the risks of COVID-19.

Essential workers are at heightened risk of contracting COVID-19 by extending their bubble and continuing to work outside of their homes to provide essential services. The essential services subsidy recognises that the workers in essential services may be particularly vulnerable to COVID-19 or may bring these risks back to those within their home bubble. For example, the essential worker may be over 70 years old, or immune-compromised or have someone in their home bubble who is. The subsidy will alleviate some of that risk by allowing essential workers to have the ability to take leave and continue to receive an income, without the pressure to come to work if they are sick, particularly vulnerable to COVID-19, or live with someone who is particularly vulnerable to COVID-19.

Who is eligible?

The Government advice in its press release on Thursday 2 April 2020 was that there are three groups of essential workers who will be eligible for the subsidy:

  1. “Workers who are self-isolating in accordance with public health guidance because they have contracted the virus, or have come into contact with someone who has contracted the virus (or have a dependent they need to care for who is sick or self-isolating).
  2. Those deemed at higher risk if they contract COVID-19, in accordance with public health guidance, and as such should self-isolate for the duration of the lockdown (and potentially longer).
  3. Those who have household members who are deemed at higher risk if they contract COVID-19, in accordance with public health guidance and as such should self-isolate for the duration of the lockdown (and potentially longer) to reduce the risk of transmitting the virus to that household member.

Official advice is that more guidance will be prepared before the scheme goes live on Monday 6 April on what these categories mean, and particularly as to who is at “higher risk”.

What is the subsidy worth?

The essential workers subsidy will be paid at the same rates as the wage subsidy scheme of $585.80 per week for full-time workers, and $350.00 per week for part-time workers. The subsidy payment will be for four weeks, with the option for essential business to re-apply for named workers after those four weeks (so long as the scheme remains open).

An essential business could add more workers to their subsidy application while the scheme is live.

How much should employees be paid if receiving the subsidy?

Employees should receive either:

  1. Their usual weekly income, if it is less than the rate of the subsidy; or
  2. If the worker’s income is usually higher than the subsidy rate, employers should make best endeavours to top up the subsidy rate to 80% of workers’ regular income.

This is the same standard as the existing wage subsidy. If employers are not able to meet the 80% standard, they will need to discuss this in good faith with the employee.

When can you apply for the subsidy?

Employers of essential workers will be able to apply for the scheme from Monday 6 April 2020. The subsidy will be available for at least the duration of the level 4 lockdown and will be reviewed after 8 weeks.

Further clarification on some aspects of the subsidy is expected before then.

Full press release here –

For more information

If you have any questions about the essential workers subsidy, please contact us for tailored advice on:

  • Wage and leave entitlements;
  • The safety of your workplace; and
  • Any provisions affecting your continued employment or engagement.

Contact our Wellington employment law experts 04 472 0020 to discuss your options.

COVID-19 - Essential Workers - JB Morrison