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Minimum Wage Hike: Impact on SMEs

Published March 30, 2023 (last updated on April 17, 2024) | Adam Wyatt - Copywriter and Content Creator

Minimum wage in New Zealand will rise to $22.70 per hour from 1 April 2023, an increase of $1.50 per hour from the current hourly rate of $21.20. While many welcome this as a major step forward for countless employees; small business owners across the country are left to wonder about the ripple effects it will have in the coming months.

There is no doubt that wage bills are one of the largest costs involved in running a business. [1]With inflation hitting its highest level in 33 years, Employsure New Zealand says it will be small business owners who will feel the greatest impact. This will impact all businesses, across all industries, who pay at the current minimum wage. Many small business owners will be thinking about their own prospects of continually being able to operate a small business. It’s not hard to imagine the added stress and burden on their shoulders as they grapple with the increase.

“It’s easy for some to say the impact of a wage rise is inconsequential, but it is small and medium businesses who struggle to offset the costs, especially those who have been decimated by the events of the past three years,” said Laurence McLean, Employsure New Zealand Associate Director.

“We receive thousands of calls to our employer advice line every month, and many of these calls are regarding employee entitlements, and we anticipate our call volume to further increase following the minimum wage rise from the 1st of April.”

“The cost of doing business just become even more challenging as mandatory wage increases are introduced, and small business employers sometimes may need to reduce the number of staff to keep up with rising costs or increase their prices.”

“We encourage employers to download our free resource, Minimum Wage Factsheet available on our website. Business owners will find this factsheet useful in understanding what has changed, what it means for them as employers and what they need to do. Our team are ready to provide support to every New Zealand employer needing help with the next steps,” Mr McLean concluded.

[1] New Zealand inflation hits 7.3%, the highest rate since 1990 | New Zealand | The Guardian

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