The Government will increase the minimum wage by 75 cents per hour on 1 April 2018 and if businesses aren't prepared, they could be liable for hefty fines
- Adult rates (16 years and over) will be increased to $16.50 per hour (currently it’s $15.75).
- ‘Starting-out’ & ‘Training’ rates will be increased to $13.20 per hour (currently it’s $12.60).
- There is no minimum wage for employees under 16 but all other minimum standards and employment rights and obligations apply. Once an employee turns 16, they must be paid minimum wage.
Under legislation employees must be paid at least the minimum hourly wage rate for every hour worked, including salaried workers. What does that actually mean..?
Well, if you have a salaried worker that when you work out their hourly rate, they are paid close to the minimum wage, you must ensure that any extra hours they work, that they do not end up being paid less than minimum wage.
Here's an example: Billy is paid $35,000 per year for his 40 hour per week job (that's $16.83 per hour). He's keen on doing a great job so often comes in earlier or stays later to do extra work. Most weeks he is working 45 hours per week. When you work out the hourly rate, this comes to $14.96 - well below the minimum wage.
- If businesses are found to be in breach of minimum wage, tough penalties (including hefty financial costs) can apply.
- The Government is looking to implement other employment changes, which will be significant to NZ businesses. Our advice is to wait until there is confirmation of exactly what the changes will be and the time frames set to implement these by.
If you need help with ensuring your business is implementing minimum wage correctly, or you want to discuss approaches for ensuring staff work within their contracted hours, you can contact us on firstname.lastname@example.org or 0211814849