In April 2020, New Zealand’s new minimum wage rates came into effect. The increase is the most substantial boost to Minimum Wage in the country’s history and will affect standard adult minimum rates, the starting-out minimum wage and the training minimum wage.
It’s important to understand the differences to New Zealand’s wage rates and how they impact your business. These include:
The adult minimum wage.
The starting-out minimum wage.
The training minimum wage.
The type of employee you working in your business will dictate which rates are relevant to you. There are some very specific details that define each wage rate, as well as who they apply to. These are outlined below.
Adult minimum wage
As of April 1, 2020 – Adult Minimum Wage – $18.90 Per Hour.
The adult minimum wage pertains to any staff member 16 years and older with the exception of trainees/apprentices or starting-out workers.
Related: New Zealand’s Minimum Wage Explained
Starting-out minimum wage
As of April 1, 2020 – Starting-Out Minimum Wage – $15.12 Per Hour.
The starting-out minimum wage affects employees who are:
16 and 17-year-old employees who have completed less than six months of continuous employment with their current employer. The employee must be paid the adult minimum wage after six months with their employer, as they are no longer classified as starting-out workers*
18 and 19-year-old employees who have been paid specific social security benefits for six months or more, and who have worked for less than six months continuously with any employer*. Specific security benefits include unemployment benefit, independent youth benefit, sole parent support, sickness benefit, domestic purposes benefit, jobseeker support and more.
16 to 19-year-old employees who are required by their employment agreement to undertake at least 40 credits a year in an industry training program towards a qualification in the field in which they are working.
If an employee is supervising or training other workers, whether classified as a ‘starting-out’ worker or not, then the starting-out minimum rate does not apply, and you must pay them at least the adult minimum wage.
*Six months of employment is calculated by the six calendar months from the employee’s first day of work.
Training minimum wage
As of April 1, 2020 – Training Minimum Wage – $15.12 Per Hour
The training minimum wage pertains to employees aged over 20 years old with an employment agreement that states they must do at least 60 credits per year in an industry training program towards a qualification in the field in which they are working.
These types of employees include apprentices, who have the same wage rights under employment law as any other employee, but could be paid the training wage.
The training wage rate doesn’t apply to anyone who is being trained on the job by their employer or another staff member. It only applies to registered training programs. If a trainee or an apprentice is training another employee or in a supervisory role, they must be paid at least the adult minimum wage.
Need help understanding New Zealand’s wage rates? Employsure can help. Contact us on 0800 675 700 for the most up-to-date information and how it applies to your business.
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