South's employers welcome wage subsidy change

Government moves to further open up the wage subsidy scheme have been applauded by employers in the South.

The Government modified its wage subsidy offering on Friday, saying companies unable to pay staff 80% of their pre-Covid-19 wage could still qualify for the support - but they had to pass on the whole of the $585 per week payment to the employee.

Virginia Nichols. Photo: supplied
Virginia Nichols. Photo: supplied
Businesses also had to keep those staff members employed and the sick leave payments announced in the initial Government support package were folded into the wage subsidy.

The Otago Southland Employers Association (OSEA) said the Government had listened, in particular, to employers struggling to pay employees 80% of their pre-Covid-19 income.

‘‘Some employers have no income at all during the shutdown, and their employees are not able to work. This will enable them to at least pay their employees the wage subsidy, chief executive Virginia Nicholls said. 

‘‘This will mean that many businesses will now be able to keep their employees on the books for the short-term, and they can then make a better informed decision after the 12-week subsidy period ends.’’

Mrs Nicholls said the association has been taking a lot of questions from its members on the terms and conditions of the wage subsidy programme - particularly to do with the 80% income requirement.

"We believe that this will make a significant difference to many members across the region."

Employers need to realise an employee that was working needed to be paid according to their contract, she said.

‘‘We recommend that if employers are not sure, they seek advice, and our lawyers are able to assist.

‘‘It will be important for employers to summarise their rationale at the time that they apply for the government funds for any audit process that will follow.’’

Finance Minister Grant Robertson said Treasury expected the wage subsidy scheme alone to cost somewhere between $8 billion and $12 billion, depending on how many businesses took it up.

He reiterated the wage subsidy scheme was there to help businesses pay wages and that it did not change employment law obligations.

The minister said $2.7 billion had been paid out to 428,768 workers.

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