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Practical advice for employers on the COVID-19 response

19 March 2020

The Government’s COVID-19 response package will reduce the dislocation to business and employment, but will not remove it.

Likely effects will include requiring employees to work from home, increased absenteeism due to sickness or to exposure from other family members, reduced working hours, lay-offs and business failure.

To provide you with an easy-to-use guide to your obligations as an employer and to the assistance available to you, we have prepared a set of Frequently Asked Questions.

What are an employer’s health and safety obligations to its employees?

An employer is required to take all reasonably practicable steps to ensure the safety of its workers, and anyone else that might be affected by its business. This will require all employers to:

  • keep up to date, and act in accordance with the latest Government, Ministry of Health and Ministry of Business, Innovation and Employment (MBIE) guidance and recommendations for COVID-19, and
  • take all reasonably practical steps to address the risk of its workers being exposed to the virus or spreading it to others

Practical steps could include:

  • requiring staff members who are unwell to remain at home
  • requiring staff members to advise you if they have been in close contact with someone who has recently returned from overseas or is otherwise at risk for COVID-19. Consider standing down any such employees and requiring them to self-isolate
  • providing guidance on good hygiene practices
  • providing hand sanitisers
  • cancelling or limiting travel to essential travel only
  • cancelling large group meetings or events
  • conducting meetings via phone or VC where possible, and
  • providing guidance on tips for keeping safe when working at home.

Employers also need to consider mental health risks and be alive to work stressors or other behaviour that could exacerbate or otherwise cause harm.

Can an employer require employees who are self-isolating to work from home?

Yes, provided the person is not unwell and is able to work, you should try to allow that person to work from home to the extent possible.

There might need to be some accommodations made, depending on the nature of the person’s duties, and you should also consider what equipment that person might need to facilitate that work.

Provide people who are working at home with tip sheets on safe home working environments and take other steps to help maintain a social connection with the team back in the office. Employees who can continue performing their usual duties when working at home should continue to be paid in the ordinary way.

Do employers have to continue paying someone’s salary when they have been required to self-isolate but cannot perform their usual duties? What about only some duties (e.g. 30%)?

No. An employer is not obliged to pay employees who are well but are required to self-isolate with the effect that they cannot work. MBIE recommends, however, that employers consider paying special leave in this situation or allow employees to use other leave entitlements.

We suggest that any such discretion be time limited or subject to a clear review right in case the self-isolation period continues beyond what is initially contemplated.

If the person can perform part of their duties then an employer could consider a pro rata payment for that work. Any such discussions would need to be addressed on a case-by-case basis and should be recorded in writing.

Where a person is in self-isolation because they are unwell, or are caring for a dependent who is unwell, the usual paid sick leave entitlements will apply, or they may choose to use their paid annual leave entitlements.

Government support is also available for any individuals who cannot work and who:

  • self-isolate in accordance with public health guidance and register with Healthline, or
  • are ill with COVID-19, or
  • need to care for a dependent in either of these circumstances.

Full time workers (more than 20 hours per week) are entitled to $585.80 per week, and part-time workers (20 hours or less) to $350 per week. These payments will be made by the Ministry of Social Development (MSD) to the employer, who must then pass it on to the affected employee. The payment is available as from 17 March for a period of up to 8 weeks and can be paid concurrently with any sick leave or annual leave entitlements that the employee may also be receiving.

If someone is required to self-isolate because they have just returned from a business trip, do I have to continue paying them even if they cannot perform their usual duties?

Strictly speaking no, because the stand-down was not at the employer’s request and was unforeseen. But as the trip was work-related, an employer should consider providing full pay or – if government assistance is available – topping the employee’s wages to their full salary and otherwise facilitating the use of any leave entitlements that the employee might have.

MBIE guidance also recommends the use of discretionary paid leave in such a scenario.

Do I have to continue paying someone’s salary who is unable to work because they are required to stay home to care for their children because the schools have been closed but neither they nor their child is either unwell or required to self-isolate?

No, in this case the employee is not ready, willing and able to perform their usual duties because of their child-care commitments. However, employers should explore all options with the affected employee to see what portion of their tasks might be able to be performed. Options could include reduced duties, amended working hours and/or job share arrangements.

Do I have to continue paying someone’s salary when we have asked them to self-isolate because we are concerned that they may pose a risk at the office?

Yes, because it is the employer’s choice to stand that individual down and the individual would have otherwise attended work. All options for working at home should be explored.

Do I have to continue paying someone’s salary when we have decided to close the office?

Yes, because it is the employer’s choice effectively to stand people down. The exception is if there is a clause in the employment agreement that provides for pay to be suspended in such situations.

Again, all options for working at home should be explored.

Should I be doing something specifically for those employees who are more vulnerable due to an underlying medical condition?

Yes, you should engage with staff who may be more vulnerable (and encourage such staff to come forward) about any additional arrangements that might be made for them.

This could include facilitating working from home. Other options might be allowing that person to avoid in-person meetings, additional hygiene measures, and any other changes in duties or work practices that assist with maintaining social distance and limiting potential causes of exposure.

What conversations should I be having if someone goes on a personal trip in the next few months? Do I have to pay for their self-isolation period on their return?

You should ask all employees to let you know if they have any personal trips booked in the next few months and talk to them about what that means. The border restrictions now in place and the requirement to self-isolate for two weeks upon return from any overseas destination, except the Pacific Islands, will probably cause most people to rethink their plans but you cannot make anyone cancel a trip.

If an employee elects to take an overseas trip, you should before they leave:

  • explore whether they can work from home on their return during the self-isolation period
  • advise them that you are not required to pay them through the self-isolation period if they are well but unable to work, and
  • advise them that the COVID-19 leave provided in the government assistance package will not apply to travel after 17 March 2020.

What if someone is worried about the virus (but is not otherwise sick, required to be in self-isolation or caring for a dependant)?

Talk with that person about what measures could be taken outside the workplace that might help to put them at ease. Offer Employee Assistance Programme (EAP) or other support. Consider offering the ability to work from home if the person is highly stressed and their job can be performed remotely. Otherwise, talk to them about using any paid leave entitlements they may have.

You have the option of allowing discretionary leave if you wish to do so. If the person insists on remaining away from the office and otherwise has no paid leave entitlements (and you are not willing to offer discretionary leave) then you should allow them unpaid leave.

Do I have to pay for my employees’ home internet if I am requiring them to work from home?

No, but you should consider reimbursing any additional expense that the employee might incur as a result of working from home – e.g., any increase in the employee’s home internet bill.

What should an employer do if an employee is confirmed as having the virus and has recently been in the workplace?

Require that person to self-isolate in accordance with government requirements and only allow return to work after the person has been given the all-clear from public health officials.

Co-operate with Ministry of Health efforts to identify close contacts of that person. This may require you to disclose the person’s identity to other staff. Care should be taken to limit that disclosure to what is necessary to address the health and safety concern and to limit widespread panic within the workplace.

The details of what this looks like will depend on the size of the business and the specific working environment.

Where do privacy rights fit into all of this?

An employee’s medical history, condition and diagnosis is personal information that you are not entitled to disclose except where disclosure is consistent with the purposes for which the information was collected, or with the person’s consent.

Any information you may have regarding a pre-existing medical condition which would make an employee vulnerable to COVID-19 should be disclosed only as necessary to take measures relating to that employee’s vulnerability.

Where an employee has been diagnosed with COVID-19 or is a close contact of someone who has contracted the virus, you should get the employee’s consent to disclose this information as necessary to others within the workplace who may be at risk.

There is an exemption in the Privacy Act that entitles disclosure where needed to protect public health and safety or the safety of another individual. Although this exemption should apply, care should still be taken to limit the disclosure to a need to know basis. The Privacy Commissioner has recommended a “common sense” approach in such situations.

What if there has been a reduction in business levels? Can I require employees to take leave or reduce hours?

If there is a reduction in work volumes and/or your business is under financial pressure, you are entitled to propose changes to work arrangements. Ideally, as a first response, you would have already initiated other measures to cut costs and invited staff to use outstanding leave entitlements and to take unpaid leave.

Any changes relating to duties, hours of work or roles require prior consultation with staff. A court would likely allow a degree of flexibility over the timeframes for this consultation and whether it is conducted on a group basis rather than individually, but the correct procedures should be followed to the extent possible.

While employers have a statutory ability to require employees to take outstanding annual leave on 14 days’ notice, an employer must first have attempted to reach agreement with the employee on when the leave is to be taken. We recommend caution before using this right, as an employer may be at risk of acting unreasonably by requiring an employee to take annual leave. However, this will be circumstance-dependent as it is a better alternative to other measures that employers could look to take, including redundancies.

Government support may also be available to subsidise employee wages in order to retain jobs. Employers can apply for a wage subsidy if they have suffered, or are projected to suffer, at least a 30% decline in revenue against last year for any month between January 2020 and the end of the scheme in June 2020.

The wage subsidy is $585.80 per week for a full time employee (20 hrs or more) or $350.00 per week for a part time employee (less than 20 hrs). The payment will be made as a lump sum for a period covering 12 weeks. This means employers will receive a payment of $7,029.60 for a full time employee and $4,200 for a part time employee. The maximum amount any one employer can receive is $150,000.

To receive the wage subsidy, an employer must provide undertakings that:

  • on their best endeavours, they will continue to employ the affected employees at a minimum of 80% of their income for the duration of the subsidy period. This is the equivalent of keeping people working 4 out of 5 days of the week
  • they have taken active steps to mitigate the impact of COVID-19 (e.g., engaged with their bank/financial advisor), and
  • they sign a declaration to that effect.

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