Omicron is here: What employers need to know about paying staff isolating at home

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The long-anticipated Omicron outbreak is well and truly here. With daily COVID-19 case numbers reaching the tens of thousands, many Kiwi businesses will already be feeling the effect of this outbreak on staff and customers, while others will be bracing for impact.

At midnight on 24 February, Aotearoa New Zealand moved into the third and final phase of the Government’s Omicron response. In this new phase, requirements to isolate after being exposed to COVID-19 have been relaxed and now only persons who have tested positive along with those in their household are legally required to isolate.

One of the biggest questions facing employers is whether they must pay staff who can’t work due to either having contracted COVID-19 themselves or because they are a household contact.

The answer, as with most answers in employment law, is that it depends on the circumstances. We’ve set out some basic guidance below:

  • If the employee can work from home while isolating, then they should be paid as normal.
  • If the employee can’t work from home because they are unwell, they should use their sick leave in the first instance. However, if the isolating employee isn’t unwell or symptomatic, they won’t be able to use sick leave unless their employer agrees to this. In this case, employees can ask to use annual leave instead.
  • If an employee who is isolating and can’t work from home has used up their sick leave or annual leave balance, then the employer should consult in good faith with the employee and see what arrangements can be put in place. This may involve the employer allowing the employee to take sick leave or annual leave in advance of entitlement, or the parties may agree for the employee to take a period of unpaid leave. Alternatively, there is the option of entering into a variation agreement to temporarily reduce the employee’s pay or hours.
  • Employers may also be able to access financial support through the Government’s COVID-19 Leave Support Scheme or the COVID-19 Short Term Absence Payment. These payments are intended to help employers pay staff who can’t work because they are isolating or because they need to isolate while waiting for a test result.
  • Under the COVID-19 Leave Support Scheme, employers can apply on behalf of eligible employees for weekly payments of $600 per week for full time staff (or $359 per week for part time staff) who need to isolate but can’t work from home. Employers are required to pass on these payments in full to the eligible employees and are required to sign a declaration that they have used “best endeavours” to pay the employees at least 80% of their ordinary salary or wages.
  • If an employee is awaiting a test result and can’t work from home, then employers can apply for the COVID-19 Short Term Absence Payment on behalf of the eligible employee. This is a one-off payment of $359 for each eligible employee, and again it must be passed on in full to the worker.

Despite the Omicron outbreak, normal employment law obligations continue to apply so it remains important for employers to properly consult with staff before reducing pay or hours or making any other changes to an employee’s terms of employment.

If you have any questions about employment law obligations during COVID-19, please contact the employment team here at Gaze Burt.

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