News

March 2020

Minister Clarifies Payment of Wage Subsidy to Employees Expand article

Previously the Government’s advice was that employers must pay the full amount of wage subsidy to the employees for whom it was claimed. This created a situation where some employees could receive more than they otherwise would have if they had worked normally.

Changes to the Wages Subsidy - The Simple Facts Expand article

Since 4.00 pm on 27 March:

To obtain the subsidy you still need to establish a 30% drop in income, or be projecting that to occur in any month between now and June.
It is not compulsory to pay your employees 80% of their previous earnings. However, if you receive the subsidy, you must use best endeavours to pay employees at least 80% of their pre-COVID-19 earnings for the 12 weeks period of the subsidy.
However, if you can’t do that you must, as a minimum, pass on the entire subsidy to every employee for whom you claimed it.
You must keep those employees employed for 12 weeks.
The amounts are unchanged and paid in a lump sum covering a 12 weeks period.

COVID-19 - Act Now To Protect Your Business Expand article

It is obvious that the COVID-19 crisis will cause major damage to a very large number of businesses. The most optimistic advice seems to be that this will run for at least 3 months, but even if that is the case, the recovery may take many more months, or even years in some cases.

The big question is what to do to limit the damage?