Coronavirus: Paying employees during self-isolation and other absences

New Zealand has implemented some of the most stringent travel restrictions in the world, aimed at preventing the spread of COVID-19. One of the key issues facing employers relates to pay, particularly as any person entering New Zealand from another country (excluding Pacific Islands) is now required to self-isolate for 14 days. As well as addressing this issue, we also outline other useful tips for employers during this time.

Paying employees affected by self-isolation requirements

Naturally, the issue of pay will arise for employers whose employees are affected by the recent travel restrictions and unable to attend work as a result. In this situation, employees are not ready and able to work, and as such they are generally not entitled to be paid, unless the employment agreement or policy provides otherwise.

However, where the employee can perform work remotely, the starting point should be making arrangements for the employee to work from home for all or part of the self-isolation period. In this case, the employee must be paid for the agreed period during which s/he has worked remotely. 

Generally, an employee who is sick, or who needs to care for a spouse or dependant who is sick, is entitled to paid sick leave under the Holidays Act 2003. In this context, sickness may include having coronavirus or symptoms associated with coronavirus (such as fever and coughing). Each employee is entitled to five days’ sick leave per year, which may accumulate to up to 20 days. 

However, many individuals in self-isolation will not be infected or sick. In these circumstances, an employer and employee may agree to recognise a period of self-isolation as sick leave. Where an employee has exhausted their sick leave entitlements, an employer may agree with the employee for annual leave to be taken. An employer may also, at their discretion, grant such employees sick and/or annual leave in advance, where all other leave entitlements have been exhausted.

Additional sick leave, or other special paid leave may also be granted to employees at the employer’s discretion. Ultimately, the arrangement agreed upon by both parties may involve a mix of paid and unpaid leave. Importantly, any arrangements made between the parties ought to be recorded in writing (such as an email to the employee).

Where an employee has advised that s/he plans to undertake international travel, both parties should consider the effects of the additional 14-day self-isolation period. An employer is entitled to advise the employee in advance that the self-isolation period would be treated as unpaid leave, unless the employer and employee has reached another arrangement relating to the self-isolation period upon returning to New Zealand.

Further, considering the additional 14-day self-isolation period, annual leave requests involving international travel may be declined by an employer where it cannot reasonably accommodate the period of absence (including the additional 14-day self-isolation period).

Where an employee is ready, willing and able to attend work

Where an employee is suspected of having been in contact with any person with the virus, and s/he has been directed not to attend the workplace, the starting point is considering whether the employee is willing, ready and able to work. If so, they are entitled to be paid in accordance with the terms of their employment agreement. Alternatively, employers may wish to direct employees to work from home, on full pay.

It is to be noted that some employment agreements make special arrangements, and these will apply according to their terms. For example, some provisions may release an employer from the obligation to pay or provide work to employees for a temporary period in certain circumstances.

Restricting all work-related travel

Given the stringent travel restrictions (and the evolving and unpredictable nature of these requirements), many employers have chosen to cease all work-related travel overseas, wherever possible.

First, given the heightened risk of exposure to the coronavirus in many countries, this is in line with the employers’ obligations under the Health and Safety at Work Act 2015 to eliminate or minimise risks to health and safety, as far as is reasonably practicable.

Further, the requirement to self-isolate may also apply in some other countries, in addition to applying upon return and entry to New Zealand. These requirements could lead to excessive difficulties and inconvenience for the parties.

Social distancing

Employers may wish to endeavour to implement practices in the workplace that encourage social distancing, in order to help control the potential transmission of the coronavirus. For example, employers ought to consider whether to postpone any events or gatherings (such as conferences and training) and consider alternatives to meetings, such as Skype or teleconferencing. Employers may also wish to encourage their employees to work remotely, where this is possible.

Many employers may find it difficult to continue having to pay employees during this time, particularly with the effects the restrictions are estimated to have on the tourism industry. Therefore, restructuring or downsizing may be an undesired, but necessary result for some employers. For more information about restructuring in the wake of COVID-19, see our previous article here.

At Jennifer Mills & Associates, we are able to advise employers on employment and legal issues arising from the Coronavirus.

Please contact us for further advice and assistance at j[email protected]

Disclaimer: Jennifer Mills & Associates has taken all reasonable care to ensure that the information materials contained in this article are true and correct at the time of publication. The information provided is general information only, and is not intended to constitute legal or other professional advice to be relied upon. Therefore, Jennifer Mills & Associates accepts no responsibility for any loss, errors or omissions which may arise pertaining to such reliance.