Source
r/newzealand•
fastAwake

Wage Subsidy Scheme Misuse/Fraud

Coronavirus

An employer I know of has applied for and been given a payout in advance for wage subsidy. They have now told their staff that they have to take any unused leave if they don't have enough work to do at home and they may cut their hours to one or two days a week.

This seems to me to be contrary to what I understand the purpose of this help to be. It was supposed to help retain employees, not get a 150k payout and screw everyone over.

I can't find any definitive information on what the conditions of the payout are. Can employers take it and then just slash hours to nothing, or make staff redundant anyway?

This isn't me, I'm doing fine. Just trying to help someone else.

Posted Mar 24, 2020, 7:53 AM UTC

4655
Gatkramp•

Report them.

54
fastAwakeOP•

Nothing has happened yet, only words. I've told them to ask for any changes to their contracted hours in writing.

The point is that I'm asking if anyone knows what the conditions actually are? Maybe this is fine and intended.

16
bobdobbs321•

A quick google will find you the conditions. But they are handing them out fairly easy to get them out fast and audited later. List of every Company that got them will be published so employees can check. So they will have to pay back if not used correctly.

18
fastAwakeOP•

That last part is particularly helpful, thanks.

6
[deleted]•

[deleted]

3
bobdobbs321•

Gov said it will online

3
Gatkramp•

https://workandincome.govt.nz/products/a-z-benefits/covid-19-support.html

The site doesn't specifically address this, but it doesn't seem to meet the intent of the subsidy. Good work on getting them to request any changes, but the key is that they should be paid 80% of their wages as the employer agreed. Less hours shouldn't change it and it certainly shouldn't be part of an enforced annual leave thing.

If they have evidence of being told to take leave and the employer definitely got the subsidy, report them. Other businesses will try the same shit unless these types of people get caught early.

Or at the very least, go to the media.

8
fastAwakeOP•

Thanks, it seems like I'm on the right track. Appreciate the input and advice.

5
Rootkit9208•

Who to?

2
Gatkramp•

They apply to Work and Income, so presumably them. Additionally, it's fraud so the Police would also want to know.

There's unlikely to be a lot of resources to throw at this problem now, but if it's reported the Police and WINZ will get to it once they have capacity.

2
RampagingBees•

Here is the crux of it:

Can employers take it and then just slash hours to nothing, or make staff redundant anyway?

No. A key part of getting the subsidy is committing to retaining and paying staff at least 80% of their wage.

30
fastAwakeOP•

That's what I thought too. Thanks for your comment.

4
4chinstolemememes•

I'm in a similar situation. My boss said he wasn't going to apply for it because he doesn't take welfare. Got told not to come in today and received email around 4pm with a variation to my employment contract effective today saying I'll be getting $585 less tax and my employment hours have gone from 40 hour to 10.

How is this legal?

9
valaranin•

A key part of getting the subsidy is committing to retaining and paying staff at least 80% of their wage. So if that is 80% of your wages, he's fine

I'm assuming it's not though given the change in hours.

Didn't think you could arbitrarily make changes to a contract without consent from both parties but I'm not a lawyer so don't quote me on that

10
4chinstolemememes•

It's not even 50%.

He variation states that it comes into effect immediately and when/If I do sign I have to back date it to today.

3
valaranin•

With regards to the Wage subsidy, report the cunt, he's trying to screw the system and his employees during a national emergency, fuck that cunt. Provide any supporting evidence you're able.

As for his attempt to force you to agree to a contract change and backdate it to financially benefit him, pretty sure that shit isn't legal but try and phone CAB or an employment lawyer for actual legal advice

17
zipiddydooda•

IANAL but we spoke with employment lawyer and you can’t just arbitrarily do this. The law applies as normal. This is totally illegal.

2
kfadffal•

I understand it might be difficult but you absolutely need to report this piece of shit.

6
trojan25nz•

the cchange in hours would be reduced operations over the containment period, which they can do?

I thought 'retaining' staff meant that they remained employed before AND after the quarantine, not that they work during the quaranatine

1
valaranin•

Taking the subsidy means you're committing to pay the employee it's for at least 80% of normal wages/salary during the 12 week period it covers regardless of hours actually worked.

They can absolutely reduce the actual hours worked but he's not doing that he's trying to change the contracted hours so wage/salary costs are covered by the subsidy alone which incidentally means he's taking a full time subsidy for OP and then only giving him part time pay

4
trojan25nz•

Ohhh thanks. That makes sense to me

1
mikalegna•

If you have not agreed to the variation it's not legal. Send back a reply with where you stand with your current contract. Make sure your read your contract over and double check you won't be worse of by not taking the deal

4
4chinstolemememes•

How could I be worse off by not taking the deal? Judging by the $585 amount that indicates that he's applied and possibly received the wage subsidy package.

Doesn't he have to make ever effort to pay me 80% of my usual wage? If he has received the subsidy why is he sending me a contract variation.

If I don't agree and he makes me redundant then I would still get 2 weeks full pay then surely he would have to pay me the money he's received from the subsidy anyway?

So many questions

3
[deleted]•

Only if he has applied for it. Big risk if he hasn't.

2
OldWolf2•

I doubt it is legal even if OP agrees

1
fastAwakeOP•

Sorry mate, seems pretty shitty. Hope things get better for you soon.

3
4chinstolemememes•

People far worse off then me, but thank you.

1
JustXanthius•

My understanding the $585 is the leave payment - which is a flat rate per person, and is seperate from the wage subsidy which requires the 80% thing, though both go through the employer. I am not sure if the two can be stacked though, as I haven’t found any information on the leave payment from after the lockdown was announced - it was originally for people who were required to self isolate fro 14 days due to overseas travel or contact with a case.

Changing your contract without approval sounds neither legal nor binding. But I don’t know enough about employment law to say what the best thing to do is

1
4chinstolemememes•

This is only wage subsidy not leave subsidy. But thanks

1
jobbybob•

If he is getting the subsidy (which happens to be $585) he would need to pay your tax and kiwisaver on top of this. $585 is the minimum you can pay your employees. He could cut your hours to make your take home pay $585 to navigate the technicalities.

His best bet is just to be honest with you. We have applied for it and received it. We will do our best to pay a minimum of 80% but at some stage we will run out of cash reserves, we have a lot of creditors who have not paid and are unlikely to pay in the current circumstances.

1
thenightcaller•

Does this mean that as an employee who works over 20 hours we are entitled to the $585?

1
jobbybob•

Yes, topped up to 80% of your pay. As I understand tax etc. can it be taken from this amount as it is a subsidy.

1
Secular_mum•

I read, on the labour dept site, that employees have to be paid at least the amount of the subsidy.

6
[deleted]•

Are you sure that's not for the leave subsidy and not the wage subsidy?

0
trojan25nz•

$585 is designated for wages only

edit: for fulltime employees under the Wage Subsidy

0
[deleted]•

It doesn't specify for that person's wage, all it specifies is they have to make a best effort to pay 80 percent, and the subsidy must be used for wages.

So looks like for many part of the subsidy on their behalf will go to other's wages within the business to get to 80 percent.

1
OutlawofSherwood•

$585 is 31 hours at minimum wage from next week, which is technically full time. Or 80% of 38 hours a week. Employers paying more than minimum wage stil have to pay 80%, they don't get extra money. Each fulltime employee allows them to claim one subsidy of $585. Part time employees get a smaller amount.

It's clearly set at exactly the minimum level to cover wages, employers won't have anything left over to 'top up' other employees.

1
jdyhrberg•

A crisis always brings out the best and worst in people. Fuck those Cunts who exploit this at such a vulnerable time.

6
zipiddydooda•

The people that do this will probably not face consequences straight away. But there is no doubt they will get absolutely fucked when the smoke clears. The intention for this money is extremely clear. Employers who misuse will likely end up on the hook for everything they stole and plenty more besides. And that’s the way it should be.

4
ThaFuck•

Not the way I read it. One of the clauses is that they musk make every effort to keep people employed. But maybe this is a grey area in itself.

I'd call or email MBIE and see what they have to say. https://www.mbie.govt.nz/about/contact-us/

3
fastAwakeOP•

Thanks. So consensus is that MBIE is the right place to report this too? Even though they apply directly to WINZ? I just followed.another posters advice of "a simple google search" and stepped through the application process a bit.

1
Onchyphora•

As far as I'm aware (not an employment whiz), depending on the timing, the employer could well be within the rules. Remembering that the subsidy doesn't cover the full 80% of wages and for many employers their income has ceased or at the least taken a massive hit, and they still have to somehow find the money to cover wages and overheads.

The general principle is that employees get to choose when they want their annual leave. But with two weeks' notice the employer can direct the employee to take annual leave. So for the first two weeks of the shutdown, the employee can choose not to take their annual leave and for the second two weeks they can be required to.

With the hours, it depends on whether their employment contract says they can change the hours.

The purpose of this is to save jobs, which means that not only does the employer need to be fair and reasonable, so does the employee. The other option if the employer can't find that money is that there is no job.

3
fastAwakeOP•

Yeah, I had similar thoughts about the annual leave rules. I thought this subsidy might have been more targeted with conditions though.

1
VBNZ89•

Cant the IRD just match their tax submissions for their employees and see that they weren't getting paid 80%?

Like how would a business get away with this?

3
OldWolf2•

They wouldn't get away with it in the long term; the question is how the employees are going to eat for the next few weeks when employers are acting illegally .

1
apieceofliquorice•

Employees are able to directly check was has been claimed against them as an individual so you can police this yourself.

3
lookingforthewhale•

How?

2
hey-hey_relax•

The company I worked for has about 35 staff. They applied for the government grant on the 19th of March and had the funds in their account the next morning on the 20th. At lunchtime on the 20th they layed off nearly half their staff saying only essential staff can stay (mostly family members) 90% of our business had been lost and they would surely become insolvent if they didn't make these cuts. On top of that they refused to pay out 4 weeks redundancy as stated in our contracts and only payed 1 week. When asked about it my boss said that we were like family to him and he wanted to make sure we signed up for the benefit early before it got too crazy and that our jobs would be reinstated when this all blows over. Good guy.

3
chaucolai•

I would look into dobbing them in - it's likely they'll be caught regardless but worth making sure of it.

2
MrManc•

My partners employer has just hinted at this.

There's an "Employer COVID-19 wage subsidy and leave payment information sheet" by the ministry of social development. Its the first document if you Google it.

In it, it states:

"Using paid leave entitlements or COVID-19 Leave Payment when self- isolating

You and your employee can agree to use any form of paid leave (eg annual leave) to cover their period of self-isolation. However, employees aren’t required to have used any or all their paid leave entitlements before they can receive this payment. Eligible employers and employees When applying for the Leave Payment the employer will consider whether: • the employee was legally working for their employer at the time they decide to self- isolate, and • they were expected to work for the period of self-isolation."

2
thecountnz•

Yes, but this isn’t self isolation is it? It’s a forced lockdown?

4
OldWolf2•

Surely if the employer claims the Leave Subsidy then they can't also count it against the employee's annual leave? I couldn't find a clear statement of this on the site though.

1
[deleted]•

[removed]

1
[deleted]•

[removed]

1
EmotionalMove5•

name and shame them RIGHT NOW!

1