Here are some things we think you might find interesting for the first week of Level 3 for your business:
- Important Business Government updates.
- Are your plans in place for your business to operate at Alert Level 3?
- Paying your staff at Alert Level 3.
- Another economy update.
Important Business Government Updates
A big announcement today – Interest Free Loans
The Government will provide interest-free loans of up to $100,000 to small businesses grappling with the impacts of COVID-19, after banks failed to meet the Government’s expectations. Here are the details:
- The loans are available for a year and will be offered to businesses with 50 or fewer full-time equivalent staff.
- The loan scheme will provide $10,000 to every firm and in addition $1800 per equivalent full-time employee. That means if a firm has three full-time equivalent workers, it would receive $15,400 – $10,000 as a base loan and $5400 for all three employees. A firm with 50 full-time workers would get the full $100,000 – $10,000 as a base loan and $90,000 for its 50 employees.
- The loans are only interest-free if they are paid back within a year. After that, the interest rate will be 3 per cent for a maximum term of five years. Repayments are not required for the first two years.
- The money can be used to cover main overheads like rent payments, insurance, utilities, supplier payments and rates.
- To apply businesses need to have been “viable” going into COVID-19, and they need to show their revenue has been impacted by at least 30 per cent as a result of the pandemic.
- The scheme will be administered by Inland Revenue who will be taking applications from May 12, and will pay out very shortly thereafter.
This news is absolutely brilliant!
On another note, the Tax Bill that was passed today, confirmed that the Government will go ahead with the support for small and medium size businesses that we mentioned in a past newsletter. You can read this again here.
We will give you another breakdown next week when more details are definite and this will also be included in our next webinar: Getting Paid & Ways to Get Your Bank Balance Up.
The Government also announced that $48 Million will be pumped into the Regional Economy through the Provincial Growth Fund, but it was disappointing to see that none of these projects are in the South Island. It would be good if your business could be a supplier for one of these projects in some way. Read more here.
Are your plans in place for your business to operate at Alert Level 3?
Worksafe and MPI will be checking businesses have put plans in place to ensure they are meeting the requirements of operating at Alert Level 3. As a minimum, you should have the following:
- Contact Tracing Form.
- Return to Work Induction and/or Company COVID-19 Policy. (This would include your health and safety measures.)
- COVID-19 Hazard and Risk Register.
- A signed COVID-19 Wage Variation Agreement for any employees that may have changes to their employment agreement.
The Worksafe website also has some guidance on how your business can operate safely here. Feel free to contact us if you would like a template for any of the items mentioned above on 03 374 9393 or email firstname.lastname@example.org.
Paying your staff at Alert Level 3
- If you have applied and received the wage subsidy, you continue to pass this onto your employees for the full 12 weeks, even if they have returned to work. Any extra hours they work over and above the subsidy amount will need to be paid from the business.
- If you ask your employees to return back to work at reduced hours, you must discuss this with them and get their consent. Any changes to their normal hours/employment agreement must be put in writing. Feel free to use our Wage Variation Template. You can find out more information about this here.
- If your business is going through hardship or severe cash flow issues, you may want to review overtime rates e.g. time and a half (if applicable), and keep reviewing this every month or as the Alert Levels change, until the business gets back on track or as a sustainability long term change. Again, this must be by mutual agreement between the employee and the employer.
- If your employees are struggling financially due to COVID-19, they may be able to reduce or suspend their Kiwisaver contributions or even withdraw some of their contributions if they meet the criteria. Read about this here. They may also be able to get more through family support. Read about this here.
Another economy update
Here is another great update from Tony Alexander (Chief Economist) on where our economy is heading and where some opportunities to invest may be. This is 11 pages so I have gone through and highlighted what I think you would be interested in. Tony’s View
Westpac is predicting the Official Cash Rate (OCR) could go negative. If this happens, I think this will help prevent interest rates from going up as inflation has already started and this makes up a portion of the interest rate. So in short, predicted interest rates will hopefully stay low, even in inflationary times.