Some employees are taking advantage of Covid to take time off when they have only a "sneeze".
The claim comes as figures show as of May 1, the Ministry for Social Development had approved 237,561 applications and paid out $237.5 million under the Covid Leave Support Scheme, which paid up to $600 for a week per staff member.
PukePine general manager Jeff Tanner was concerned some were using the pandemic as an excuse to take time off work.
"There were only one or two, but those one or two let you down.
"They get a sneeze and they are off."
In his view, the Government's stance on Covid testing and isolation was also '"illogical and oppressive".
The company bought hundreds of RATs in December so that it could verify and keep track of staff who had Covid. It also adapted its system to meet newer Ministry of Health guidelines, but Tanner said there had also been delays in getting Covid funding for its staff, and they tried to top up with extra leave payments.
"It has been a problem, so in the meantime a lot of people are living week to week and that can add quite a lot of financial stress. We can try and help with sick leave or annual leave within the boundaries of what we are allowed to do.
"But there is only so much we can do."
Tanner said more than half his 180 staff had self-isolated due to Covid in March and April and production had dropped 25 per cent.
McLeod Cranes managing director Scott McLeod said he could understand why some employers might think their staff were taking advantage of the situation.
"It's a rabbit hole. There is no ability to check and an employee only has to be symptomatic - and how do you measure symptomatic?"
McLeod said the company worked on a high-trust model and he was proud of his staff despite being down on average three to four workers a week.
"At the moment I think we have got to have a lot of trust in our team, we need to look after each other and be hiring the right people."
Rotorua businessman Nathan Shaw was aware of other employers who had been scammed but his four companies were not affected.
"I've heard of other people having drama with those who have scammed Covid."
Tauranga Chamber of Commerce spokeswoman Laura Boucher said businesses were
concerned about who would be isolating on any given day and whether they could operate.
"It has also put pressure on other team members who have had to pick up the workload while the business is short-staffed. People are exhausted and we're only halfway through the year."
The Government's support had not covered all payments.
Business owners have had to dig deep to cover full staff payments in order to retain staff because labour was scarce.
"This is putting pressure on business margins, which are already being squeezed due to overall rising costs.
"There is overall frustration at the pandemic as people are exhausted and resources are stretched. We're hearing that some business owners are weighing up whether it's worth the administrative effort to apply for government funding."
Retail New Zealand chief executive Greg Harford said the organisation was aware of some cases where a relatively small number of "employees were taking advantage of the Covid situation to claim time off".
If an employer was using the Covid leave scheme to pay its employees, it was required to sight evidence that the person had Covid or was required to isolate.
"In most cases, employees who are abusing any kind of sick leave or Covid provisions will be in breach of the terms of their employment contracts and could face disciplinary action."
Harford had heard it was definitely taking longer for Covid payments to be made.
Restaurant Association chief executive Marisa Bidois said businesses should be asking employees to log their positive results on My Covid Record and were within their rights to ask for proof of a positive result.
"We haven't received any complaints from businesses on this."
New Zealand Kiwifruit Growers Inc chief executive Colin Bond said the kiwifruit industry in the Bay of Plenty was fortunate that the peak of Omicron hit before the peak of labour required for harvest.
However, absenteeism due to Covid had affected labour supply and, despite employing more Kiwis, there was still a labour shortage.
Fonterra NZ manufacturing director Alan Van Der Nagel said the scale of its business and the nature of Covid meant it was not unexpected that employees would need to isolate.
"We are managing this situation in a number of ways. Key to this is our people, who have stepped up and delivered, working flexibly to keep the milk moving through our supply chain.
"While the Omicron strain has presented new challenges due to its higher transmission rate in particular, we have continued to evolve our response."
A Port of Tauranga spokeswoman said infection and isolation had caused worker shortages in parts of the port at various times, but it managed to keep cargo moving.
It had about 270 direct employees and about 60 Covid cases during the outbreak.
Ministry of Social Development client service support group general manager George Van Ooyen said "employers need to take steps to satisfy themselves that employees are genuine".
He said employers must sign a declaration acknowledging employees on their application for the Covid Leave Support Scheme met eligibility criteria.
This included, according to the declaration, that the employee "has advised you that they are required to self-isolate because they have Covid-19".
According to its website, applications for the Covid Leave Support Scheme - of $600 a week for full-time workers and $359 for part-time workers - were taking up to five days to process.
It asked employers not to call them to check the status of their applications.
"We're currently receiving large numbers of applications. We're working as quickly as we can."
However, Van Ooyen said it aimed to process Covid Leave Support applications as efficiently as possible.
Since December, the average time it has taken for applicants to receive their payments was two working days.
Under Phase 3 and Ministry of Health guidelines, close contacts of people with Covid don't have to isolate but are asked to monitor their symptoms.
More than a million cases of Covid-19 had been confirmed in New Zealand since the pandemic began - equal to a fifth of the country's population, the NZ Herald reported.
The total number of publicly reported deaths of people with Covid on May 9 was 857.
Last month it was reported that people were selling Covid-positive rapid antigen tests on social media and one post said "Well, have I got the deal for you, 4 positive tests for sale [aka get out of jail free cards]."
University of Otago epidemiologist Michael Baker said "it's not funny" and was tantamount to fraud.