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The government has announced its framework for the nine-day working fortnight.
The scheme was floated February's job summit whereby some workplaces move to a nine-day working week to avoid redundancies, with the government partially subsidising the tenth day.
Prime Minister John Key confirmed details of the scheme at the Beehive on Wednesday.
He says the government will pay workers the minimum wage ($12.50 an hour) on the tenth day of employment - which will be used for training - for up to five hours a fortnight.
The voluntary scheme will be open to companies with more than 100 full time employees, of which there are around 1,600 in New Zealand.
"By reducing hours, employers will be able to retain their workforce and will be better equipped to respond when economic circumstances improve," Key said.
The funding will be available to up to 10 employees for each averted redundancy.
Deputy political editor Francesa Mold says the scheme will be time limited, signalling that the government does not have an open cheque book.
Companies who enter the scheme will be able to be subsidised for up to six months between March 27 2009 and December 31 2010.
The scheme will be geared towards unions because of the ease of collective agreements that can be made, but it will not be exclusive to unions.
It will be up to employers, workers and unions to negotiate agreements with workers - and workers included in the scheme will not be able to be made redundant.
The scheme is expected to save between 20,000-25,000 jobs and will cost somewhere between $16 million and $20 million.
Opposition MPs have expressed concern that it does not do enough for other workers, covering only about 15% of the work force.
However, Key said while there will still be redundancies, he hopes the scheme goes some way towards saving jobs.
"This is a practical measure that will give businesses some extra time to ride out the tough conditions, and to retain jobs as they do," he said
Key said the government is also looking at how small businesses might be able to benefit from a similar scheme.
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Post new commentlawstudent711 said on 2009-03-11 @ 18:22 NZDT: Report abusive post
Although the idea is good, many companies qualify, many of the employees won't, because a lot of bigger companies have permanent part-time employees, i.e students or others who don't work 5 days a week, and yet its these people who need the money they get the most. By working any benefits are affected and now the number of hours available is too, yet working beneficiaries and students don't any further support.