Minimum wage set to rise.
Minimum wage rates are reviewed every year. The Government announced in January that the minimum wage will increase by 50 cents to $15.75 on 1 April 2017. The starting-out and training minimum wage rates will also increase from $12.20 to $12.60 per hour.
Employees have to be paid at least the minimum hourly wage rate for every hour worked.
The minimum wage applies to all hours worked. There is no minimum hours requirement. For example, an employee who works only two hours at a time must still get the minimum wage for each of these hours, unless the employee and employer have agreed to a higher rate in the employment agreement.
How does this affect me?
If you pay your staff at the current rate, you must increase pay to the minimum rates but only from 1 April 2017.
If you already pay above the minimum wage rate, you may not be required to increase your employees’ wages, provided the rates you currently pay are above the increased minimum wage.
There are three minimum wage rates:
Adult minimum wage
The adult minimum wage applies to all employees aged 16 and over who are not starting-out workers or trainees, and all employees who are involved in supervising or training other employees.
This is the minimum wage that is most widely used by New Zealand businesses of all shapes and sizes.
The starting-out wage applies solely to workers entering the workforce for the first time.
Starting-out workers are:
16 and 17-year-old employees who have not yet completed six months of continuous employment with their current employer.
18 and 19-year-old employees who have been paid a specified social security benefit for six months or more, and who have not yet completed six months continuous employment with any employer since they started being paid a benefit. Once they have completed six months continuous employment with a single employer, they will no longer be a starting-out worker, and need to be paid at least the adult minimum wage rate.
16 to 19-year-old employees who are required by their employment agreement to undertake industry training for at least 40 credits a year to become qualified.
Training minimum wage
The training minimum wage applies to employees aged 20 years or over who are completing recognised industry training involving at least 60 credits in order to become qualified.
Most of the time the training minimum wage applies to apprentices. An apprentice has the same minimum rights and protections under employment law as any other employee but may be paid the training wage.
If you require advice regarding the new minimum wage rates, please contact an Employsure specialist on 0800 675 700.
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