Coronavirus / COVID-19 and the Workplace - How to pay employees for absences from work

As people’s uncertainty and level of anxiety around the risks of Coronavirus / COVID-19 rise, we are committed to keeping the community connected, not just to the latest information available, but access to practical advice about what to do. See below our links to other information in this series of articles to help employers navigate the rapidly changing business landscape.

This article addresses the issue of pay, which is at the forefront of considerations for employers and employees alike.

Do I have to pay employees required to self-isolate?

Generally, for employees are affected by the recent travel restrictions and unable to attend work as a result, they are not “not ready and able to work”. Accordingly, they are generally not entitled to be paid, unless the employment agreement or policy provides otherwise.

If an employee is able to perform work remotely, the employer should make reasonable arrangements to enable the employee to work from home for all or part of the self-isolating period. In these circumstances, where an employee is effectively able to work, this period or work must be paid.

If the employee is not able to work remotely/from home, an employer and employee could agree that the employee take paid leave such as paid sick leave and/or annual leave or apply for the COVID-19 Leave Payment. Where an employee has no entitlement to paid leave, you could also consider the ability to advance paid leave, or make a discretionary payment for that leave period.

Do I have to pay employees who are sick or need to care for a dependant?

Generally, if an employee is sick, or needs to care for a spouse or dependant who is sick, the employee is entitled to paid sick leave under the Holidays Act 2003. Sickness may include having Coronavirus/COVID-19 or symptoms associated with it. 

Employees are entitled to five days’ sick leave per year, which may accumulate up to 20 days. It is worth employees being aware of sick leave entitlements of their staff and letting them know early during any period they are off work what the impact of that leave will be on their pay.

Practicalities

Any arrangements made about leave, (whether sick leave or a mix of sick leave, annual leave, or discretionary leave), between the employer and employee, should be recorded in writing to avoid any uncertainty. This can be as simple as an email from the employer, with a request for confirmation by the employee.

Now is a good time to review leave balances, so that you are prepared to understand what the current business leave liability is, your obligations regarding what may need to be paid, possible solutions to advance leave, and so that you are in an informed position to respond to any employee queries.

What do I do if an employee wants to travel?

Some employees may have plans to travel internationally, which were approved prior to cases of Coronavirus/COVID-19 being confirmed in New Zealand. We recommend both parties reconsider those plans. An employer is entitled to raise concerns about the effect of an additional 14-day self-isolation period, which could be treated as unpaid leave.

For any future leave requests involving international travel, it would likely be reasonable for an employer to decline such an enquiry, where it is unable to reasonably accommodate the period of absence (including the additional 14-day self-isolation period).

What do I do with an employee that is ready, willing and able to attend work, but who is suspected of having been in contact with a person with Coronavirus?

If you have an employee who is suspected of having been in contact with any person with Coronavirus, and who has been directed not to attend the workplace, the starting point is considering whether the employee is willing, ready and able to work. If they are, then the starting point will be that are entitled to be paid in accordance with the terms of their employment agreement. Where there is the ability for the employee to work remotely, then it is sensible to make arrangements to enable the employee to be directed to work from home, on full pay. 

If your business is unlikely to have the funds to be paying for employees for a continued period in these circumstances, then your good faith obligations dictate that you should be raising this with employees early, before Coronavirus/COVID-19 is in New Zealand through community transmission, as opposed to isolated cases from those who have travelled internationally recently.

The DTI Lawyers employment team remains available to field enquiries from businesses (big and small) regarding the ongoing developments related to COVID-19 and its impact. We are resourced to work remotely, and have capability to manage both urgent and ongoing enquiries. If you would like further information or specific advice, please contact us on 07 282 0174.

The information contained in this article is accurate as of the date of publication, but please note in this rapidly moving environment, you should review the DTI Lawyers website, or contact our team, to ensure it remains up to date. We note this article is written on 18 March 2020 and the advice reflects expectations as at this date.