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Lockdown leave, pay cuts, reduced hours: what’s allowed?

We’ve been getting quite a few questions from our clients during Level 4 lockdown about the responsibilities of employers. We’re not HR specialists or employment lawyers, so we don’t have all the answers. Luckily, the Ministry for Business Innovation and Employment (MBIE) has been busy setting out all the information you need.


Two of the most commonly asked questions are:


1. Can I make employees take annual leave during lockdown?

The short answer here is no. You can talk to your employees and try to come to an agreement about how their annual leave might be applied during lockdown, but you can’t make them take annual leave starting immediately. The only time you can make an employee take annual leave is when an agreement cannot be reached about when the annual leave will be taken – and you must give them at least 14 days’ notice. Get all the details here.

2. Can I make employees take a pay cut during lockdown?

Again, the short answer is no. You can negotiate for a change in pay, hours or duties, but you need to reach an agreement with the employee. It must be set out in writing and the employee needs time to consider the new arrangement.

Remember, you can apply for the wage subsidy or other financial support if your business revenue is suffering under lockdown. Read more about your options here. You could also give us a call on 09 366 6008.


Where to find more information

The Employment website, provided by MBIE, lets you navigate all your responsibilities as an employer during lockdown. For instance:

If you’re concerned about your business’s finances during this time, we can help you identify what help you might be entitled to and apply on your behalf, so give us a call – we’re here to help!

Email us 

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Chris Lynch, CA

Managing Director, Lynch & Associates Limited

Get in touch by Email or Phone: +64 9 366 6008

Chris is the founding Director of Lynch & Associates Limited.

He qualified as a CA in 1973 and is a full member of the College of NZICA now merged with CAANZ. His expertise is in the areas of tax, accounting, business development, forecasting, and auditing. He has a clear focus on adding value to his clients lives and businesses and seeing the people behind the numbers.

Chris experience includes working as a CFO and company secretary for some of New Zealand’s leading companies before starting his own CA firm in 1999. In his previous roles Chris has worked in the wool, dairy, engineering FCG, banking and investment banking and stock broking industries.

Today he uses this vast experience to assist his clients add value to their businesses and personal lives. 

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