Process Employee Payments during Lockdown (NZ)

Overview

There are two potential methods for processing COVID Wage Subsidy payments for employees during the August 2021 lockdown in New Zealand, each with its own considerations. The method that you choose is a business decision.

Both options can be set up and managed on the job using a bulk upload list.

Payment rates

The Wage Subsidy August 2021 will cover a two week period at the rate of:

• $600 a week for each full-time employee retained (20 hours a week or more)
• $359 a week for each part-time employee retained (less than 20 hours a week).

Hours that fluctuate and casual workers

If your employees work variable hours, you can use an average to work out what rate to apply for.

Use the average hours worked each week:

• over the last 12 months, or
• over the period of time you (or they) have been employed (if it's less than 12 months).

If the average hours are:

• 20 or more, apply for the full-time rate
• less than 20, apply for the part-time rate. 

Option 1: Using Rate Cards

To use this method, you will need to configure and assign a bulk upload list  so that your relevant employees or temps are not able to key in timesheets. Timesheet data will be uploaded as part of the bulk upload instead.

You'll need to set up one of the following in your portal prior to importing the bulk upload file. 

• Create a new job for each impacted employee that is set for Payroll only and working for you (eg Astute Payroll would set up employees with a job at Astute Payroll). The job should be set up not to charge, and placed with your business as the employee is physically not working. 
• For each impacted employee or temp, go to Users > Employees > select the employee > select the job > Job Details. Ensure that the 'Use Timesheet For' section is checked for Payroll only. The Invoicing checkbox should be unticked; or,
• Create a pay rule within an existing job to ensure that when a COVID item is paid, the item is not charged.

It is a business decision which option you choose. Please consider that, if an employee is working at the same time as receiving a COVID payment, you may prefer to create a separate job so that time actually worked and the COVID payment amounts are separate. If the employee is solely receiving a COVID payment, you can use the one job. 

Set the Employee's Rate

To set the employee's rate, create a rate card with a minimum wage rate (eg $20) and set this in the Job Details > Timesheet Settings section for the relevant job for each employee. 

When you are completing the bulk upload file, you'll need to enter the number of units for each employee that will take their total earnings to meet the $600 entitlement. In the example above, if the rate card is set with a rate of $20, you would enter 30 hours. 

Top Up Payments

If an employee has worked during the period, but has not earned enough to meet the relevant subsidy amount for that employee, you should manually apply any top up payment to ensure they earn at least as much as the subsidy amount.

Note: When you add the top up amount, make sure you’re not paying it as 1 unit of the top up amount, as this may impact leave calculations. 

For example, an employee’s average hours are over 20 hours a week, so they’re entitled to the $600 wage subsidy. They worked one day before lockdown, working 8 hours @ $20 per hour.

A top up payment should be made to the employee of 22 units x $20 to ensure they’re paid the $600.

Employees No Longer Eligible

You'll need to manually manage instances where the wage subsidy isn't applicable to an employee (eg if the employee works their normal hours) by removing the imported rate and entering their normal pay data.

If the wage subsidy won't apply to the employee on an ongoing basis, you may also consider removing that employee from the import file. 

Option 2: Using a Set Rate per Employee

The second method is similar to the first, but instead of using a rate card, you will set the rate directly in the employee profile. 

The bulk upload list will need to be configured and assigned so that employees are unable to key in timesheets. As above, this data will be imported as part of the bulk upload. 

You'll need to set up one of the following in your portal prior to importing the bulk upload file.  

• Create a new job for each impacted employee. The job should be set up not to charge, and placed with your business as the employee is physically not working. 
• For each impacted employee or temp, go to Users > Employees > select the employee > select the job > Job Details. Ensure that the 'Use Timesheet For' section is checked for Payroll only. The Invoicing checkbox should be unticked; or,
• Create a pay rule within an existing job to ensure that when a COVID item is paid, the item is not charged.

It is a business decision which option you choose. Please consider that, if an employee is working at the same time as receiving a COVID payment, you may prefer to create a separate job so that time actually worked and the COVID payment amounts are separate. If the employee is solely receiving a COVID payment, you can use the one job. 

Set the Employee's Rate

To set the rate on the employee profile, go to the relevant job then click Job Settings > Edit Rate and update their Pay Rate as their average (ie $600 divided by their normal number of hours worked). For example, for an employee who works 30 hours a week, enter $20 as the pay rate. Enter the other required fields, then click Add Rates. 

When you import your bulk upload file, you'll need to check that each employee has units entered that will take their total earnings to the $600 entitlement. For example, if their pay rate on the job is $20, they'll need 30 units entered in the file; if their pay rate is $30, they'll need to have 20 units entered. 

As with the first option, you'll need to manually adjust any employee pays where the employee works normal hours, applying a top-up pay. You'll also need to manually manage instances where the wage subsidy isn't applicable to an employee (eg if the employee works their normal hours) by removing the imported rate and entering their normal pay data.

Selecting an Importer

Regardless of your preferred option, you will need to bear in mind the implications of the importer that you choose to use:

• Fieldglass. If you are using the Fieldglass importer, you should be aware that all units that are entered will be allocated to the Sunday (or Sundays) of the period. This can potentially impact the accuracy of leave accrual and dynamic rate (RDP and ADP) calculations, assuming that the pay item being used is included in your accrual items and contributes to the Definition of Time Worked.
• Generic Importer. You will need to use this importer if you would like to break down the units into a daily import. This will need to be entered as Start and Stop times, but will reduce the impact of the RDP rates being inconsistent compared to Fieldglass (which will not have RDP for 6 of the 7 days of the week). 

When you enter units against an employee, you will need to ensure that the units you enter match your rate (ie for employees on hourly timesheets, the units will be hours and the rate is an hourly rate).

You should also consider that the more granular your break down of the units per week, the more accurate your leave units and dynamic rate calculations will be moving forward.

Other Considerations

There are several other important things to consider when processing COVID payments:

• If Holiday Pay should accrue on a payment, you will need to make sure it has been selected on the leave category. 
• If the payment should be considered a part of gross earnings in dynamic rate calculations, please review your dynamic rate settings, enabling or disabling as required. 
• You'll need to review your Definition of Time Worked configuration depending on whether these payments should contribute to time worked calculations. 

Further information on Government Subsidies

We also recommend staying informed on possible changes to COVID wage subsidy eligibility by referring to the Work and Income website.