The Government is expanding its nine-day fortnight job support scheme to include businesses with 50 to 100 workers, Prime Minister John Key said today.
When the scheme was introduced after February's jobs summit it applied to businesses with more than 100 workers and it has had limited success.
So far three big companies have signed up, saving 117 jobs, although another 60 are considering joining it.
Mr Key said expanding the scheme would open it to another 2000 firms and around 140,000 workers.
If about 6000 workers from medium-sized businesses took part, it would cost around $4.5 million.
Mr Key said the scheme was being expanded following discussions with employers and unions since the jobs summit.
"We realise that businesses with fewer than 50 employees are also facing tough times," he said.
"These firms will not be included in the scheme, mainly because the scheme is too difficult to administer for small workplaces."
Mr Key said work was being done on measures to help small firms and there would be further announcements.
The scheme lets private sector businesses, workers and unions negotiate voluntary agreements to reduce their hours of work to a nine-day fortnight.
The Government pays employers $12.50 an hour per worker - the adult minimum wage - for up to five hours a fortnight.
"It is aimed at businesses that may be facing temporary adverse circumstances in the current economic climate," Mr Key said.
"A temporary reduction in hours gives employers time to ride out adverse conditions and gives workers job security during that time."
Business NZ said it made sense to extend the scheme.
"This is only one part of the overall picture and it will not be the answer for every company, but it has the potential to ease the payroll pressure on those firms suffering the effects of the downturn," chief executive Phil O'Reilly said.
Labour Party leader Phil Goff said the "patch-up" would do nothing to reassure thousands of people who were worried about losing their jobs.
He said 60 percent of the workforce and more than 90 percent of businesses were still ineligible for the scheme.
"New Zealanders need to see a government in charge of the economy and providing leadership instead of one that sacks public servants without a second thought, says it's too hard to help small businesses but asks private businesses to keep workers on and ride out the recession," Mr Goff said.
