Coronavirus Preparedness for Business

Elbow bumps

Like many other businesses, we have been watching warily as the news of the coronavirus (COVID-19 virus) spreads closer to home.

If employees have been travelling overseas or are planning to travel, what are our responsibilities to all employees? How do we manage health & safety risks? What if our supplies are disrupted or people are quarantined? Is there financial relief for businesses affected by the coronavirus?

We've dusted off our crisis management plan, and asked our employment and financial advisors for their take on how businesses can cope with the pandemic. Here are our tips to help your business get through.

Keeping Employees Safe

The Ministry of Health recommends basic hygiene measures to stop the spread of infections: regular hand washing, staying at home if sick, covering coughs and sneezes and cleaning surfaces regularly. Have plenty of soap, cleaning products, paper towels available and encourage their correct use.

Each business has its own risk factors, which you will need to assess as an owner/manager. If you have a retail outlet, then a bottle of hand sanitiser by the EFTPOS keypad would be a reasonable precaution. Avoid face to face meetings with people who have recently travelled. Maintain a social distance (1metre / 3feet) when meeting others. Encourage employees to stay home when sick. If social distancing is not practical, have disposal gloves and face masks available and train employees to use them correctly.

Glen and Serena bump elbows

Our favourite alternatives to handshakes are: the Thai greeting "Sawadee" with palms together, steepled fingers and a warm smile; or the playful elbow bump suggested by our client John. Not finger guns though!

Provide employees with seasonal flu vaccination, if they want it. Contact your local GP or pharmacist for more information. Make use of mental health services if employees are anxious or stressed.

Leave Obligations for Employers

Employers and employees are obliged to act reasonably and in good faith, in accordance with the employment agreement, Health and Safety at Work Act 2015 and the Holidays Act 2003.

At the time of writing, people returning from China, Italy, South Korea and Iran have been recommended to self-isolate for 14 days.

While self-isolation is not mandatory, it is important for the health & safety of your other employees. You could require a medical clearance before allowing that person to return to work. Could that person work from home for that period?

Who pays for the self-isolation when the person is not sick? Employment New Zealand suggests that if that person is not working from home, then you first treat the self-isolation period as sick leave. If there is not enough sick leave, then by agreement you could pay from annual leave or grant them leave in advance. EMA says if a person is fit to work and the employer refuses to allow them to work, the employer must pay that person for that period (such as suspension).

Getting financial relief

Coronavirus has impacted tourism and education industries, due to a sharp decline in demand. It is likely to impact hospitality and events industries if people become anxious about going out. Other businesses have been impacted due to: supply shortages from import delays; tightening demand, both here and overseas; or customers paying slower than normal. Nick Tuffley, ASB Bank's chief economist recommends making sure you are in regular contact with your key suppliers to understand their supply chains and obvious weak points. (ASB Economic Note "Thinking about coronavirus impacts on business" 5 March 2020)

If your business has been impacted financially by the coronavirus, contact your insurance advisor to see if your situation is covered for business interruption insurance. Contact your bank to move to interest-only repayments to reduce the cashflow burden. If you need help preparing cashflow projections, we can assist you. Talk to us about a fee instalment plan.

There are a number of ways that you can get tax relief. For income tax, you can estimate your provisional tax down before the third provisional tax due date (7 May for most taxpayers). If you've overpaid provisional tax you can ask for a refund.

If you need more time to pay any of your tax obligations, you can apply for an instalment arrangement. Under certain circumstances you can ask for remission of late filing and late payment penalties. IRD will also consider a write off for serious hardship.

The Government has released its Business Continuity Package  (https://www.beehive.govt.nz/release/cabinet-approves-business-continuity-package-response-covid-19) which includes a targeted wage subsidy scheme, training and re-deployment options for affected employees and working with banks for working capital support for businesses. They have opted not to stop the increase in minimum wage from $17.70 to $18.90 on 1 April 2020, and we think they missed a chance to help all NZ businesses and employment rates.

Planning for the Worst, Hoping for the Best

How will widespread illness, school closures, loss of key customers affect your business?

If you're worried about the future, then your employees probably are too. Showing leadership, being proactive and communicative at this time, will do a lot to reassure your team. Ask them for input into identifying the risks and your emergency planning. We can also help you with contingency planning.

Have a communication plan. Do you know how to reach your employees, suppliers, and key customers if your IT goes down? If you can't be reached, can someone else access this information? How do you reach families of staff?

Back up your data, offsite or in the cloud. Not just your accounts, but any vital information that you need to run your business. Assess if remote working is possible and test your systems. How quickly could you be operational if you couldn't access your workplace? Practice retrieving your data, so it becomes a familiar process.

Examine your processes and decision-making methods. Could the business continue without you or your key people? Have multiple ways of accessing key information so that business can continue, despite disruption or staff absences.

Take care of your own health and your employees. Make your business more resilience by reviewing systems and mitigating risks. Seek financial help if cashflow is tight. Plan ahead to ensure that your business survives the coronavirus.

Download a PDF version here or contact the author by email. Like our Facebook page for regular tips.

- By Serena Irving, JDW Chartered Accountants

Serena Irving is a director in JDW Chartered Accountants Limited, Ellerslie, Auckland. JDW is a professional team of qualified accountants, auditors, business consultants, tax advisors, trust and business valuation specialists. 

Useful Links:

Ministry of Health

Employers and Manufacturers Assn

Employment New Zealand

National Emergency Management Agency

Inland Revenue