Payroll changes due to Force Majeure (unforeseeable circumstances)
Refer to the table below and consider your situation.
The article by Buddle Findlay employment lawyer Sherridan Cook is worthy of a read.
The Health and Safety at Work Act 2015 requires businesses to mitigate health and safety risks and protect their workers from them, as far as is reasonably practicable.
The Employment contract is also critical. Does the contract include the “force majeure” clause which means unforeseeable circumstances such as a pandemic, war, earthquake etc? Read over your contracts and consider your response when asked by your employees.
Apply for the government grant if sales will suffer by more than 30% in any one month compared to last year.
Summary:
Employee Situation | Employer response |
|---|---|
Employee sick | Sick leave or annual leave (if available) |
Employee not sick but dependents (children/partner) sick. | Sick leave or annual leave (if available) |
Employee not sick, children not sick but children home from school. | No sick leave/annual leave unless otherwise agreed. |
Employee voluntarily stays at home due to potential virus risk (self-isolation) |
|
Employee fit for work but no work available. | Employee entitled to be paid even if no work. Employer should consider redundancy. |
Contractor in self-isolation | No obligation to pay. |
*Everything must be agreed and in writing.
If you are interested in reading the full article by Buddle Findlay employment lawyer, Sherridan Cook... click here
Change of work pattern (e.g. 5 days to 3 days)
What if you need to change the work pattern for your current employee?. We’ve had several employers needing to reduce the ‘normal hrs’ worked to keep people employed due to the downturn. One employer is moving employees from 5 days to 3 days and suggesting employees take an annual day leave (so the employee gets paid for 4 days).
What to do in any payroll?
Example: Reduce employees normal hours per week from 5 days to 4 days.
- Print the Holiday Pay report – this is the amount owed to your employee = $XX (A)
- Alter your days worked (say from 5 days to 3 days)
- Recalculate the leave balance so the total balance = $XX (A)
Important Notes:
- Keep screenshots of the holiday pay before and after the change.
- Make sure you communicate the change to your employee and the employment contract is updated and signed.
If you’re not sure how to do this in your payroll, contact us.
