COVID-19 Update August 2021

Despite the uncertainty created by the re-emergence of COVID-19 in the community, and the inability to predict exactly how long the country will remain in lockdown, established employment law principles continue to apply. At the heart of these principles is compliance with terms agreed in employment agreements and the statutory obligations placed on both employers and employees including the obligations to communicate, be responsive, and act in good faith.

In previous lockdowns employers have grappled with whether an employee who cannot perform work while they are required to isolate by a Government mandated lockdown are ‘ready, willing and able’ to work so as to entitle them to be paid in accordance with their employment agreements. Litigation concerning the application of this test from the first Level 4 Lockdown in April 2020 remains ongoing and we recommend caution when looking to this test. Guidance from the Employment Relations Authority suggests that if the employment agreement does not provide for suspension of wages or salary in the present circumstances, the employer will not be released from its obligation to pay wages or salary. An employee’s agreement or a fair and appropriate process would need to be followed before any changes are made to an employee’s pay rate or hours.

We recommend consulting with employees and exploring all available options to retain and pay employees if possible. If retaining staff on full pay is not financially feasible, we strongly advise seeking legal advice before taking any actions.

For more information on the implication of lockdown for you or your business, please look at our previous article of April 2020.

Government support

The Government has announced it will reinstate the COVID-19 Wage Subsidy and Resurgence Support Payment to all New Zealand businesses and self-employed people impacted by New Zealand moving to COVID-19 Alert Level 4 on 17 August 2021.

COVID-19 Wage Subsidy August 2021

The Wage Subsidy August 2021 will cover a two-week period at the rate of $600 a week for each full-time employee retained (20 hours a week or more), or $359 a week for each part time employee retained (less than 20 hours a week).  As was the case with previous wage subsidies, the subsidy will be paid in a two-week lump sum. It is important to note the subsidy must be used to pay employees’ wages and receiving it does not change existing employment law obligations or entitlements.

Eligibility for the COVID-19 Wage Subsidy August 2021

As with previous wage subsidy pay outs, the eligibility criteria must be met. Businesses must be able to demonstrate they have had, or predict to have, a decline in revenue of at least 40 per cent during the 14-day period between 17 August 2021 and 30 August 2021 (inclusive), compared to a standard 14-day consecutive period of revenue in the six weeks immediately prior to the move to Alert Level 4 on 17 August 2021 (the Default Comparator Period).  This change in revenue must be directly attributed to this change in alert level.

Businesses with highly seasonal revenue may compare their revenue to the same fortnight period in either 2020 or 2019 to determine whether they meet the required revenue drop to be eligible for the subsidy. Further, these applicants must demonstrate the seasonal nature of their business makes it harder to meet the 40 percent revenue decline using the Default Comparator Period, than if their business was not of a seasonal nature.

Before making an application, you must have taken active steps to mitigate the impact of a loss in revenue on your business activities from the move to Alert Level 4 on 17 August 2021. This includes, but is not limited to, engaging with your bank, drawing on cash reserves as appropriate or making an insurance claim.

Applications for the COVID-19 Wage Subsidy August 2021 are open for a two-week period from 20 August 2021 until Friday 3 September 2021, providing a window of opportunity for business to ascertain their entitlement. The payment will usually be available after three days and those who are eligible can apply via the Work and Income Website.

Further information can be found here.

Resurgence Support Payment

The COVID-19 Resurgence Support Payment was also reinstated on 17 August 2021. The Resurgence Support Payment is available is for businesses and organisations who incur a loss of 30 per cent of revenue as a result of the Alert Level 4 increase over a 7-day period. The Resurgence Support Payment covers other costs apart from wages that businesses may incur, and payments are likely to be made around three days after applications are lodged.

Eligible businesses and organisations can apply to receive the lesser of:

  • $1,500, plus $400 per each full-time equivalent employee, up to a maximum of 50 full-time equivalent employees; or
  • Four times the actual revenue decline experienced by the applicant.

Those who are eligible can apply through the Inland Revenue site. Further information can be found here.

Leave Support Scheme and COVID-19 Short Term Absence Payment

The Leave Support Scheme and the COVID-19 Short Term Absence Payment remain available during this lockdown.

The Leave Support Scheme is available for staff who must self-isolate and cannot work from home. It provides a two-week lump sum payment of either $585.80 per week for full time workers, or $350 per week for part time workers. More information can be found here.

The COVID-19 Short Term Absence Payment provides a one-off (once per 30 days) $350 payment for eligible workers who must miss work while waiting for a COVID-19 test result and cannot work from home. This is also available to self-employed workers. More information can be found here.


It is not possible to receive more than one COVID-19 payment from Work and Income NZ for the same employee. This includes the Wage Subsidy, the Leave Support Scheme and the Wage Subsidy Extension. However, employers can still apply for the Resurgence Support Payment through Inland Revenue.

More Information

Given the uncertainty of the rapidly evolving situation, we encourage clients to reach out to a member of the Dyhrberg Drayton Employment Law team for advice regarding any specific situations.

You can contact us on:

T: 04 550 4060 or 04 550 4062 (these numbers will divert to our mobiles)

E: or