COVID-19 Alert Level 4: FAQs for New Zealand businesses

1 September 2021

To help businesses navigate the changes currently occurring throughout the country as a result of COVID-19 risks, we’ve prepared a list of Frequently Asked Questions regarding New Zealand’s Alert Level 4.

Frequently Asked Questions

We are not an essential business and my employees are at home and not working – can I make them take annual or unpaid leave? Sick leave?

You can only direct employees to take annual leave by giving them 14 days’ notice. Given the changing timeframes surrounding lockdowns, this may be of limited use.

Remember – employees can agree at any time to take annual leave or unpaid leave.

Sick leave should only be used when employees are actually sick. If they are well and at home, sick leave is unsuitable.

We are not an essential business and my employees are at home and not working – can I change their hours or pay rate or direct them to take unpaid leave?

The short and safe answer: only with your employees’ agreement.

It is a well established principle that an employer should only change an employee’s rate of pay or hours of work with their agreement. However, given the unusual situation both employers and employees find themselves in, we still do not have a definitive answer from the Employment Court.

A safe approach is to discuss proposed changes with your employees with a view to obtaining their agreement. Be cautious of any undue pressure.

We’re legally allowed to open, but my employer has been directed to self-isolate. Do I have to pay them?

If the employee has been directed to self-isolate or stay at home (see the below sections under “Support for Businesses” where self-isolation is discussed) remember they legally cannot come in to work. You may be eligible to apply for the Leave Support Scheme or Short-Term Absence Payment or Wage Subsidy for them in these situations.

We’re legally allowed to open, but my employee won’t come in to work. Do I have to pay them?

Establish why the employee is not willing to work – you may be able to apply for a subsidy for them.

Those that do not meet the criteria for any relevant subsidy should be dealt with on a case by case basis. One option may be to propose they take a period of unpaid or annual leave to cover this time. If they agree, get this agreement in writing.

Sick leave can be used here if the employee, or their dependant, is genuinely unwell.

We are an essential business but my employee has no childcare available, what can I do?

Limited childcare is available for Level 4 workers. More information is available here.


  • Remember, if you have received any support payments in an employee’s name, the correct portion of these funds must be passed on to them – whether they are working, not working, on sick leave or annual leave.
  • Things like hours of work or unpaid leave can be negotiated with employees. If you negotiate and obtain agreement, ensure this is in writing (Note: You can never agree on a pay rate lower than minimum wage).
  • A force majeure (act of god) or business interruption clause must be used carefully – we highly recommend seeking advice before using one.
  • We recommend adopting a working from home policy, including asking employees to complete a health and safety ‘self-check’ to ensure things go as smoothly as possible and ensuring there is an agreement of any costs upfront.
  • We also recommend a COVID-19 Policy setting out how your workplace operates at each alert level.

Support for Businesses

Leave Support Scheme (LSS) is available for employers with employees, or self-employed people, who have been told they must self-isolate and cannot work from home. It is a two-week lump-sum payment of $585.80 per week for full-time employees or $350 per week for part-time employees.

To receive this payment, the employee must have been directed to self-isolate – this is not a decision the employee, manager or employer can make.

Employees must meet at least one of the below criteria:

  • Are sick with COVID-19 and have been told to self-isolate by a Doctor,
  • Are identified as someone who has been in close contact with someone who has COVID-19 and have been told to self-isolate for a period by a health official via contact tracing,
  • Are the parent or caregiver of a dependant who has been told to self-isolate for a period by a doctor or health official via contact tracing and the dependant needs support to do so safely,
  • Have been directed to self-isolate, or are the parent or caregiver of a dependant who has been directed to self-isolate, by a Medical Officer of Health,
  • Are considered 'higher risk' if they contract COVID-19 and a doctor has told them to self-isolate while there's active community transmission, or
  • Have household members who are considered 'higher risk' if they contract COVID-19 and a medical practitioner has told them to self-isolate.

The LSS will not be paid for employees who do not fit into one of the above categories.

More information on the LSS is available here.

Short-Term Absence Payment (STAP) is available for employers with employees who need stay at home while awaiting the results of a COVID-19 test and cannot work from home. It is a one-off payment of $359 for each eligible worker.

If an employee has COVID-19 symptoms and are tested, they must stay home until receiving a negative test result and until 24 hours after their symptoms are gone.

More information on the STAP is available here.

The Wage Subsidy (WS) is available at a rate of $600 per week for full-time employees and $359 per week for part-time employees. There are extensive eligibility criteria employers must meet.

More information about the wage subsidy is available here.

The Resurgence Support (RS) is a lump-sum payment available to help businesses with their ongoing expenses like wages and fixed costs. More information, including eligibility is available here.

What should I apply for?

Employers cannot receive the WS, STAP or LSS at the same time. The RS payment is available to employers while they receive another type of payment.

We recommend speaking to your Findex adviser if you need assistance or are unsure of what type of support to apply for. Your adviser will also be able to assist you in making your application.