Burger King breach: it affects your business too!

Burger King has been banned from hiring migrant workers for a year after it paid one of its managers below the minimum wage. Think this only applies to big NZ companies? Think again...

It's a legal requirement for any and every business in NZ to pay all their staff (NZ citizens, residents, and those on working visas) at least minimum wage for all hours worked. And that's they key point - all hours worked.

Minimum wage is currently $16.50 (before tax) for adults and when you work out the hours your staff work, by the amount they are paid, they must not be below this amount.

Example: Julia has just graduated from uni and has started in a marketing assistant role for a small business of 6 other people. She is being paid $35,000 per year for a 40 hour week. Julia loves her role and happily stays on for around 30-45 minutes every day after her normal finish time when her boss asks her to as they are so busy. She is working around 42.5+ hours per week. When you work out her hourly rate she is being paid below the minimum wage for all hours worked.

While the above example might seem harmless - and let's be honest - all businesses can be busy, it is a breach of NZ employment laws. Your business could be fined and/or restrictions placed on it, like Burger King has, not to mention the negative media coverage.

Key tips:

  • Paying staff for each hour worked (i.e. hourly wage, instead of a salary) might be better for those on, or close to the minimum wage.

  • Keep an eye on staff hours, particularly those who are paid at, or close to, the minimum wage and who are paid a salary instead of hourly - you may consider paying overtime.

  • Legally you are required to keep daily records of actual hours worked, so time sheets or a clock in/out system can be useful.

  • You need to keep records of actual hours worked for 7 years (and 7 years after an employee leaves your business).

  • If you are paying the employer contribution of Kiwisaver 'inclusive' (included) of wages or salary, you must ensure that this amount does not take the hourly rate below the minimum wage.

If you would like further advice on how the minimum wage legislation affects your business, please get in touch with HR associate. Contact Anna Goodhue, Senior Consultant on anna@hrassociate.co.nz or 021872279.