The Government will increase the minimum wage by $1.20 per hour on 1 April 2019 and if businesses aren't prepared, they could be liable for hefty fines

Adult rates (16 years and over) minimum rates will be increased to $17.70 per hour (currently it’s $16.50).
‘Starting-out’ & ‘Training’ minimum rates will be increased to $14.16 per hour (currently it’s $13.20).

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 staff member 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.

“Julia works a couple of extra hours a week - surely that’s not an issue? “ Well, actually it is…

Julia is paid $40,000 salary per year for her 40 hour per week job (that's approximately $19.23 per hour). She's keen on doing a good job so often comes in earlier or stays later to do extra work. Most weeks Julia is working 45 hours per week. When you work out the hourly rate, this comes to $17.09 - well below the minimum wage. Even if Julia is happy working these extra hours, it is illegal, and if businesses are found to be in breach of minimum wage laws, tough penalties (including hefty financial costs) can apply.

A note about KiwiSaver

If your business pays staff KiwiSaver inclusive of salary or wages, you must ensure that when you take away the employer’s KiwiSaver contribution, that they are still paid at least minimum wage - for every hour worked.

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 karyn@hrassociate.co.nz or 0211814849.