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How the coronavirus pandemic and NZ lockdown may be affecting you and your early childhood service - questions, discussions, concerns, help.
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TOPIC: Covid-19: ECE Employment and Financial Q & A

Covid-19: ECE Employment and Financial Q & A 2 months 1 week ago #931

  • ChildForum team member
  • ChildForum team member's Avatar Topic Author
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The following points and discussion are just about everyone meeting their legal obligations or minimum requirements. Getting through the crisis is about as best as possible negotiating and agreeing on something which will in effect spread the pain, but hopefully get as many parties as possible through to the other side. In the words of our Prime Minister Jacinda Arden "Be strong, be kind".
Help others by building on this article through adding comment and discussion. Please note the disclaimer at the end of the article and also you need to know that I am not an employment lawyer. Take care, Sarah Alexander (ChildForum chief executive)

"The wage subsidy is a Government payment to help employers pay wages. It does not change any other employment law obligations, meaning employees must be paid appropriately under their employment agreements" (Grant Robertson, Finance Minister)

Would insurance cover have benefited our service?
Some services may have been paying out a lot in premiums for years for pandemic or business interruption insurance that covers Acts of Man (as opposed to Acts of God). Pandemics are thankfully very rare, so insurance for this is not considered worth the cost as our sector is heavily subsidised and supported by the government. The insurance company will require that full subsidies are obtained first. There may therefore be little benefit for services in having this insurance, because of funding continuance, wage subsidies, mortgage free holidays and financial business loans offered by the government. Where the service is claiming for loss of income from fees, the names of families and private financial details should not be provided to an insurance company without the express permission of each family .

Should an employee not be able to comply with an employer’s request to provide for the care of children of an essential worker (e.g. due to being or living with an older or vulnerable person/s), what options are available?
Under the Health and Safety at Work Act employers are required to take all reasonable steps to provide a safe working environment for employees. In the context of the Covid-19 pandemic, this would include putting into place appropriate safety protocols, including personal protective equipment and social distancing. An employee who considers there is a serious risk to themselves of or to a vulnerable person at their home of catching the virus, may refuse to undertake the work while trying to resolve the matter with their employer.
Go to another article on this topic for more information: "What it means for those providing care for the children of essential workers"

Can relievers and home-based educators who are self-employed or contractors receive their usual income during the lock-down?
Relievers and Homebased educators who are independent contractors can apply for the wage subsidy under the self-employed category.
BUT if a casual worker e.g. a relief teacher for a particular service then the service applies for the subsidy and the service continues to pay their employee. The service should inform the worker that it is applying on their behalf.
There is possibly no obligation for services to pay relief staff booked to work for any days that fall within the lockdown period, due to variation in working hours and they may cancel the booking, however they may also chose to pay relievers thereby keeping good-will.

What about support for teachers who have gone from permanent work to relieving very recently?
See answer to the above question.

Can an ECE service drop the wages of staff to 80% or lower, or not pay staff during the lockdown?
First consider the following:
  • ECE services are in a unique position compared with many businesses whose income is entirely dependent on sales, such as cafe owners who are now receiving no revenue with which to pay their staff (if it wasn't for the government wage subsidy).
  • ECE service providers receive a large proportion of their revenue not from sales, but from the government in the way of funding subsidies; and they will continue to receive funding during and after the lockdown.
  • ECE services are not reliant on tourists or overseas students for revenue and will therefore in general be a lot less financially impacted compared with a great number of businesses in NZ who are reliant on the tourist dollar or overseas student enrolments, including universities.
  • The NZ Wages Protection Act (1983) requires employers to pay staff according to the day, frequency and intervals agreed on in their employment contract. Any delay in payment or not paying the full of wages/ salary constitutes a violation. An employer cannot reduce an employee’s pay without the employee’s written consent. If agreement cannot be reached and other alternative options have been exhausted, an employer may force a reduction in pay by relying on the ‘frustration of contract’ principle.
    When a business is otherwise likely to go under if the employees do not take a temporary cut in pay, accepting a pay cut may in this situation be seen to be the better option. But realistically, how many ECE services will go under in 4 weeks while receiving government funding for children that are not attending, and with ability to access wage subsidies, business loans, and receive a mortgage and interest holiday? ECE services may also have financial reserves put away for a project or for an occasion such as this.
    Owners might have to make some personal sacrifice and bite the bullet and pay 100% wages. The alternative is potential damage to the reputation of their service and going forward a drop in funding as they lose qualified teachers who are not easy to replace (and will no longer be so easily replaced by bringing in foreign teachers willing to work for less wages than what a teacher is worth).

    What if the ECE service just can’t continue to pay wages to staff because there is no work
    An employer’s good faith obligations require that consultation with affected staff is carried out and a fair process is followed in deciding whether to make positions redundant.

    How do staff know their employer isn’t double-dipping – asking staff to forgo their normal wages and pocketing the wage subsidy from WINZ?
    To apply for the wage subsidy, employers must enter online the names of employees, their IRD numbers and their contact details. Employers should ask employees permission to share their private contact details.
    Contact WINZ if you have any concerns that an employer may not be paying staff or has made a staff member redundant but collected the wage subsidy.

    Can ECE Services require staff to use their sick leave?
    If staff are not sick, sick leave should not be used

    Can ECE services require staff to use their annual leave?
    Employees can opt to take leave if they do not want to work during the lockdown period and there is an agreement with the employer to do so.
    It is possible that an employer may require employees to take annual leave, but consultation is required first and at least 14 days' notice must be povided.

    “Annual leave while the workplace is temporarily closed. As a first principle, employees should be able to decide when to take their annual holidays. Employers and employees may agree to take annual leave during temporary closures of a workplace due to COVID-19. If an employer and employee cannot agree, an employer may direct annual leave be taken if they have first discussed this with the employee and provided 14 days’ notice before the annual leave is to be taken. (Employment NZ website)

    Is there a work from home expectation for staff who continue to be paid ?
    Yes. If being paid during the lockdown and there is work that can be done at home an employer may reasonably expect this. An employer may potentially take disciplinary action if the employee does not do the work they are instructed to do. This may for example include online meetings, reviewing research as part of updating their professional learning, and completing admin tasks.
    However, go to the ECE sector survey report to learn about the realities/ constraints on providing distance education and teachers being expected to work at home: Covid-19 and the ECE sector report looking at the questions of can staff be expected to carry on working remotely and can distance education be provided appropriately and adequately to under-5s

    What if the employee can’t work from home and the service can't afford to keep the employer on?
    An employee may expect to continue to be paid if an employer can’t otherwise provide work for them. However, if there is a force majeure clause in the employee’s employment agreement in case of events that are unforeseeable, this could possibly be used to release an employer from their contractual obligations to the employee.
    Go to information here on the redundancy process.

    When working at home or off-site can an employee claim for expenses?
    Check if the employment agreement provides for reimbursement of work-related costs.

    Are ECE services, relievers and home-based educators required to show they are providing distance education for children to get the wage subsidy?
    No. Check the requirements on the Work and Income website.

    Can the ECE service require families to continue to pay fees, 20 Hours ECE optional charges and any other charges?
    Go to a post on this topic

    What financial support is available to ECE services?
    1. Full funding continues for all ECE services while closed due to COVID-19. Services would have recently received the latest funding payment, and they will get the next in due course so there is nothing to worry about regarding funding continuance. Funding makes up the largest proportion of income for most services.
    2. All ECE services, including those that have been operating less than 12 months, can apply for a contribution to assist them to meet the wage and salary costs of employees for 12 weeks (the lockdown is 4 weeks so the subsidy extends beyond the lockdown to continue to assist employers to meet their employment obligations). The wages subsidy is
    • $585.80 per week for a full-time employee (20 hrs or more)
    • $350.00 per week for a part-time employee (less than 20 hrs).
    The payment will be made as a lump sum. This means ECE services will receive a payment of $7,029.60 for a full-time employee and $4,200 for a part time employee.
    ECE services are eligible where they can show a 30% decline in revenue, attributable to COVID-19, against a similar time period the year before (or for new businesses and high growth ECE services this might be a 30% loss of income when comparing say January 2020 to March 2020). Deloitte has an article with explanations and examples for employers.
    People who are self-employed and have variable monthly incomes are eligible if they can show a 30% decline in revenue, attributable to COVID-19, against the previous years’ monthly average (i.e. 30% loss of income comparing March 2020 to the average monthly income in the period March 2019 to March 2020).
    3. Government support includes business finance support loans. As well, home-owners (including home-based educators) and small to medium sized businesses with mortgages can apply for a six-month principal and interest payment holiday.

    Will ECE teachers and managers, kaiako, visiting teachers, and hospital-based teachers be paid the $585. wage subsidy?
    It is paid directly to the ECE service and not to employees.

    Disclaimer: The following information is of a general nature and opinion only, and is not intended to address specific circumstances of any individual, entity, or situation. You are advised not to rely on this information. Specific advice should be sought before undertaking any specific action. Contact a qualified professional such as a lawyer and to talk Employment NZ (0800 20 90 20) before taking any specific action. The content of this opinion article may be added to, updated, or otherwise changed without notice.
    The following user(s) said Thank You: Nga Wawata ECE Kaitaia

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    Last edit: by ChildForum National Office.

    Covid-19: ECE Employment and Financial Q & A 1 month 1 week ago #933

    Under level 3 I will be returning to work, working onsite around 20hrs and a little from home too. My employer said he is still going to pay me at 80% during this time, even though they have the subsidy money for me. Is this correct?

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    Covid-19: ECE Employment and Financial Q & A 1 month 1 week ago #934

    • ChildForum team member
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    Hi Anonymous, what you have described for pay doesn't sound ethical and it may not be legal. Suggest for employment advice and to understand better what your legal position is, that you contact Employment NZ phone 0800 20 90 20.
    In regard to the wage subsidy, employers must pay at least 80% of usual wage to employees working reduced hours while self-isolating.
    But you are now not self-isolating and returning to the worksite so shouldn't you be on 100% usual pay? (but, if you have agreed to have a pay drop on return to the worksite then you can be paid less). An employer cannot pay an employee less, than what is stipulated on the employment contract, unless the employee agrees (and signs). Talk with your employer if possible and/ or contact Employment NZ.

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    Last edit: by ChildForum team member.
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