How to pay and manage your employees during COVID-19
The COVID-19 crisis has brought about swift changes affecting businesses all over the world. The implications for employers are widespread and complicated, with businesses having to navigate everything from standing down employees, to self-isolation regulations, to stimulus packages, for the first time.
It’s a trying time for everyone, particularly when the rules seem unclear and the guidelines change almost daily. That’s why we’ve put together this guide to everything you need to know about paying and managing your employees during the COVID-19 outbreak.
Standing down staff
Can I stand down staff?
According to the Fair Work Ombudsman, businesses can “stand down” staff when employees cannot do useful work because of certain factors that are out of the employer’s control, such as the current coronavirus pandemic. An employer cannot stand down employees simply because the business is quiet during a normal economic period.
Can employees resign?
Yes. As per normal resignation rules, employees will need to provide the relevant notice period. If they are being stood down, their notice period can run during the stand down period.
Can employees be made redundant?
Yes. If during a stand down period you find that your business is unable to continue operating or you need to make employees redundant, normal redundancy entitlements and rules still apply. This means that you need to either allow your employees to work their notice periods after the stand down period is over, or arrange payment in lieu of notice.
It’s important to note that the Fair Work Commission (FWC) has determined that employees are still entitled to public holiday pay even if it occurs in the event of a stand down, meaning they still need to be paid for the hours they’d normally work on those public holidays.
Can casual employees’ hours be reduced?
It depends. If you have genuine casuals (those who work on ad hoc basis, don’t have regular shift patterns, and can accept or reject shifts), you can reduce their hours to maintain business operations.
If you have regular casuals (those who work similar shift patterns for at least six months), you can’t unilaterally reduce their hours without consultation as they need to be treated like permanent employees.
Can employees take annual leave?
Yes. The newly passed JobKeeper legislation will provide qualifying businesses with payments that can be used to subsidise holiday pay for employees. You can ask employees who have been stood down to take annual leave, so they will keep getting paid, as long as they are not left with less than two weeks’ leave.
For team members who have not been stood down, regular annual leave rules apply. If they have booked leave and want to cancel, or if you are busy and need them to work, pre-existing leave can be changed by mutual agreement.
Can employees take sick leave?
It depends. Sick or personal leave is designed to be used when employees or their family member has an illness or injury. If you have to stand down employees, it is not appropriate for them to take sick leave unless they or a member of their family is unwell.
Another way to look at this is if employees misuse their sick leave entitlements now, they won’t have any left to use when they really need it. These same rules apply during a stand down.
Can employees take long service leave?
It depends. If you have stood down employees, they can only take long service leave if it is mutually agreed to. Otherwise, the usual rules for taking long service leave apply. Eligible employees should take their full annual leave entitlement or an extended period of time off, unless a shorter period of leave is mutually agreed with the employer. The legislation in NSW and Victoria provide more flexibility, allowing for shorter durations of long service leave.
Social distancing and self-isolation/quarantine
What is the difference between the two?
Social distancing is the practice of physically separating yourself from others to avoid contracting COVD-19 and slow its spread in the community. Self-isolation or quarantine is the government-ordered separation of those who have contracted COVID-19 from the general public.
Do I need to pay employees who have been ordered to self-isolate?
Not ordinarily. If employees cannot attend work because of government-ordered self-isolation, you are not obligated to pay them unless a mutual agreement of leave entitlement is met. However, you can allow them to work from home and be paid as normal if it’s possible.
Do I need to pay employees who choose to practice social distancing?
No. If employees are refusing the opportunity to work then you are not obligated to pay them. However, you can allow them to work from home and be paid as normal if it’s possible.
Do I need to pay employees who I’ve told to self-isolate?
Yes. If you’d like your employees to self-isolate even though the government has not ordered this, you are obligated to pay them at their usual pay rates.
Do I need to pay employees if they have COVID-19?
Yes. If your employees or their family member has COVID-19, they are entitled to their sick or personal leave and you need to pay them accordingly.
Do I need to pay employees who choose to stay home as they await COVID-19 test results?
No. It is a government directive to self-isolate under this situation, so you are not obligated to pay them. However, they should be allowed the opportunity to work from home or exercise their leave entitlements if possible.
Do I need to pay employees who cannot attend work to look after their children?
No. Employees who choose to stay home to care for their children are not entitled to sick or personal leave, unless they or their children have COVID-19. Another way to look at this is in a normal year when there are school holidays or pupil-free days, working parents arrange for the relevant care for their children, and this situation should be treated the same way. However, sick or personal leave can be taken for unexpected emergencies, such as a school or childcare shutting down with less than 24 hours’ notice.
Business stimulus and support
The Australian Government has announced a number of stimulus packages to help businesses stay afloat during the COVID-19 pandemic. These stimulus packages are primarily designed to help businesses manage cash flow and retain staff, and we’ve explained how you can claim these benefits.