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Improved Covid-leave

Summary:
The government has announced a strengthening of the Covid-leave scheme. From early 2021, presumably once they have the mechanics worked out, businesses will be eligible for support if workers need to self-isolate after a Covid test, while waiting on a result, and are unable to work from home.From the Beehive's release:A new Short-Term Absence Payment will be available to eligible employers to support eligible workers who cannot work from home to follow public health guidance and stay home while waiting for a COVID-19 test result. It is also available to eligible self-employed workers, and to parents or caregivers of dependents who are required to stay at home awaiting a test result where they need support to do so. This will help businesses to continue to pay people who can’t work from

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The government has announced a strengthening of the Covid-leave scheme. From early 2021, presumably once they have the mechanics worked out, businesses will be eligible for support if workers need to self-isolate after a Covid test, while waiting on a result, and are unable to work from home.

From the Beehive's release:

A new Short-Term Absence Payment will be available to eligible employers to support eligible workers who cannot work from home to follow public health guidance and stay home while waiting for a COVID-19 test result. It is also available to eligible self-employed workers, and to parents or caregivers of dependents who are required to stay at home awaiting a test result where they need support to do so. 

This will help businesses to continue to pay people who can’t work from home while waiting for a test result to protect others from possible COVID-19 transmission. The payment will be a one-off flat-rate payment of $350 for each worker who meets the eligibility criteria and will be available from early 2021. 

Employers or the self-employed will be able to apply for the STAP once in any thirty-day period per eligible worker (unless a health official or medical practitioner advises or requires the worker to re-test). If a worker needs to self-isolate following a positive test result they then may also be eligible for the existing two week Leave Support Scheme. The Leave Support Scheme remains available at all levels. 

I'd worried that absence of this kind of payment discouraged people from going for testing. 

My column from the Dom back in November

Every sick day kept in the bank is valuable. You might get sick later in the year and be caught short. You might need to stay home to tend to a sick kid. Unless this day is likely to be one of the five worst days of the year, workers aren’t likely to stay home.

On the other side, and especially for smaller employers, scrambling to fill an unexpected vacancy can be costly. If you have a hundred people on deck, you’d expect one or two to be absent and have enough staff to cover. Sorting out that coverage can be much harder for a small firm. If every worker stayed home with every mild cold, your sick leave budget would blow out.

During a pandemic, it is incredibly risky if neither the worker nor the employer really want a worker to wait on a test result. But measures like doubling the number of available sick days are both too blunt and too costly.

They are too blunt because, for mild symptoms, the calculus doesn’t change much: Unless the day is likely to be in your 10 worst of the year, you’ll prefer to go in. And when accommodating sick leave is costly, it is very easy to start wondering whether an employee is taking the mickey

The costs of having each worker out for an additional five days per year, if it’s all used up, do add up.

How to square the circle? On January 29, Singapore implemented its Quarantine Order Allowance Scheme. The self-employed or employers of workers falling under a Quarantine Order could claim $100 per day. Employers needed to show proof that they continued to pay the quarantined workers, and employees were required not to break the quarantine order.

That scheme solves the incentive problem. The employer cannot access the funding unless the worker maintains quarantine. And the worker must not break the order. Both have a reason for the worker to stay home.

New Zealand’s Covid-19 Leave Support Scheme took a page from Singapore’s book, but needs a few tweaks to really be effective. The scheme compensates employers, including the self-employed, if they need to self-isolate and cannot work from home.

It provides excellent coverage for workers who have been required to self-isolate because they have Covid or because they have been told to self-isolate as a close contact of a case.

It covers you if your child has been told to self-isolate and you need to provide support.

And, for a few workers in a few critical health sectors, it also provides coverage while waiting on a test result.

All of that is laudable.

But if you’re a hospitality worker, or a retail clerk, or a bus driver, you will not be eligible if you’ve developed symptoms, gone to a mobile testing station, and are waiting on results. The pernicious calculus remains. Are your symptoms really that bad? How many sick days do you have left? How annoyed is the manager going to be if you need to stay home for a couple of days?

The Covid-19 leave scheme should be updated to avoid those kinds of problems. Really, it should never have had those holes in coverage in the first place.

In the week to November 13, 24,574 people not linked to the border were tested for Covid-19. If each spent two days at home while waiting on a test result, that’s about 50,000 days of Covid-leave. The median weekly wage is about $1000. If every person staying home were compensated, it would cost about $10 million per week.

A week of Auckland being at alert level 3 costs, by one estimate, $440m per week. If a nationwide Covid-leave policy reduced the chances of a four-week Auckland lockdown by only a single percentage point in each week it was in place, it would have paid for itself almost twice over.

And we could, like Singapore, couple the scheme with rather substantial penalties for firms telling workers to show up while waiting on test results.

The 2020 Budget was meant to have allocated enough funding to cover the Covid Response. But actual public health measures, like proper Covid-leave to encourage people to stay home when they may be infectious, have been nickel-and-dimed. Meanwhile, the budget included over $70m in support for horse racing – enough to cover about seven weeks of proper Covid-leave.

Rather glad that the government is moving to fix this one! 

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