COVID-19: audit process will expose business abuse of wage subsidy | Employment Law Update May

The New Zealand Government has spelt out measures to ensure that businesses do not abuse the wage subsidy available to them if their revenues are down.

As already announced, an employee who believes that their workplace is accessing the scheme but not meeting the conditions it agreed to — for example to pay its employees at least the amount they receive under the scheme, or its employees’ normal wages if they are lower — can make a complaint to Employment New Zealand (Ministry of Business, Innovation and Employment (MBIE)).

Ministers Grant Robertson and Carmel Sepuloni have now announced that the government is prioritising the audit process for businesses for which complaints have been laid. A dedicated Ministry of Social Development team (overseen by a team of fraud experts and investigators) is working with Inland Revenue and MBIE in relation to this process. Applicants for the subsidy have already been informed that if they provide false or misleading information, they could be subject to civil proceedings for amounts received that they were not entitled to and/or prosecuted for offences under the Crimes Act.

The Ministers have provided some statistics as to the position so far. As at 21 April, 1,281 applicants had voluntarily advised they want to refund all or part of the subsidy. This could be for a number of reasons, including the receipt of insurance, or favourable revenue forecasts for the company. Fifty-six applicants had been asked to refund either all or part of their subsidy.

Information reproduced with permission of Wolters Kluwer

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