Are wages or salary payable if the business is closed?

What should employees be paid if the workplace is closed under the Health Act or Civil Defence Emergency Act?

Firstly refer to your Employment Agreement. What did you agree on?

Is this what you agreed?

Where the Employer is obliged to temporarily cease operation by reason of emergency or extreme weather conditions, the Employee will receive payment for the hours the Employee would have worked during the first day any such cessation. Thereafter the Employer shall not be obliged to pay the Employees wages, but the Employee can elect to be paid out annual holiday’s entitlement to cover the remaining period of the closure.

Wages are normally payable if the employee is ready and willing to perform work. However, in an earthquake situation, Civil Defence may not allow employees to enter the work site. This will give rise to OSH issues. Please be careful. In addition the work site must be deemed SAFE before you allow yourself or your employees to enter.

Use Annual Holidays Whereever Possible

Employees and employers can also agree to alternative options. Options such as annual holidays or unpaid leave will be available in accordance with their employment agreement and related workplace policies.

An employer can also require an employee to take annual holidays if the both of you cannot reach agreement as to when the holidays will be taken and employers give the employee at least 14 days’ notice. This only applies to annual holidays that the employee is entitled to on each anniversary of the date they commenced employment. If your employee refuses to take annual holidays on less than 14 days’ notice you cannot require them to.

Where practicable, employers and employees can also agree to alternative work arrangements such as working from home.

If you can not agree on what to do then suggest to your employee that they seek an emergency payment from WINZ. Annual Holidays will probably need to be exhausted before this could be granted.

Be willing to debate the issue at some later time in mediation.

If your Employment Agreement is silent on a closure because of an emergency or if employers are required to give notice to require the employee to take annual holidays one can use a ‘Letter of Variation’ to waive the ’14 days notice period’ by agreement only.


2 thoughts on “Are wages or salary payable if the business is closed?

  1. Can you provide links to this in employment law in terms of work being closed/sent home because of severe weather posing health and safety risks? Thanks

    1. Hi Josh,

      The general rule is if the Employer chooses to close then they still need to pay you. If you choose not to come to work then they are not obliged to pay you but I guess you could request Annual Leave on the day.


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