A nine-day working fortnight is likely to be a reality by the end of the month for workplaces trying to stop lay-offs, and the Government is expected to offer an allowance equivalent to the minimum wage for the tenth day.
After a spate of redundancies over the past fortnight, the Government is moving quickly on its plans for the initiative which was one of the key ideas to emerge from the Job Summit.
The Cabinet is understood to have considered a minimum wage level allowance to cover wages on the tenth day yesterday.
Prime Minister John Key said he expected to make an announcement on the scheme this week and an allowance was "possible".
It will be the first initiative from the Job Summit to result in concrete action.
The minimum wage is set to rise from $12 to $12.50 an hour on April 1. Staff are likely to be expected to undertake some form of training on their tenth day of work. It is understood an allowance would not cover a full eight hours.
The urgency of providing support for businesses has also seen the Cabinet drop its initial plans to run a limited pilot scheme before deciding whether to make it broader.
It is likely to be running by the end of the month.
Minister of Social Development Paula Bennett and Minister of Education Anne Tolley are in charge of working on the proposal.
A spokesperson for Ms Bennett said work on the "possible" allowance was progressing well.
It is hoped the scheme will stem job losses by allowing companies to cut their wage costs without losing staff.
The Government had initially indicated a reluctance to subsidise wages, preferring instead to fund training programmes for 10th-day workers.
It disappointed trade union representatives, who insisted the nine-day plan would not succeed if there was not some form of subsidy for workers.
EPMU national secretary Andrew Little said an allowance at the level of the minimum wage would be "hugely problematic" for many workers. He had hoped for wages to be paid to the level of the median wage - about $17 or $18 an hour.
"We'll have to see how it plays out with employees. I do think it's good something is happening straight away. The urgency has been rising since last week when there were a number of announcements of job losses. It's starting to bite, so something has to be done pretty smartly."
The Government is also expected to fast-track the introduction of its Youth Guarantee scheme which provides free education to 16- and 17-year-olds even if they chose to leave a traditional school and take school-level subjects at a tertiary institution.
It is hoped it will help keep young people in education for longer.
The Cabinet also allocated about 50 Job Summit ideas to various ministers. They include Mr Key's proposal of a national cycleway, which he will oversee as Minister of Tourism.By Claire Trevett @CTrevettNZH Email Claire