The minimum wage applies to all paid employees 16 years-of-age and older, although there are different rates if your employee is 16 or 17 and is new to the workforce or if they are completing training.
As an employer, you’ll need to keep up-to-date with the latest minimum pay rates and pay your employees at least the current minimum rate. This rate stands even if your employee only works a few hours for you each week or has little responsibility at work.
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There are two separate wage rates:
- The adult minimum wage
- The starting-out wage
The adult minimum wage
The current adult minimum wage rate (before tax) is $13.50 an hour, which is $108.00 for an eight-hour day or $540.00 for a 40-hour week.
This applies to all employees aged 16 and over who aren’t new entrants or completing industry training. This is the minimum wage that applies to the majority of New Zealanders in paid employment.
The starting-out wage
The starting-out wage is focussed on 16 and 17 year olds starting out in the workforce; 18 and 19 year olds who have been on a benefit for six months or more; and 16 to 19 year olds in training in a recognised industry training course involving at least 40 credits a year.
The starting-out wage replaced the new entrants wage and training wage for under-20s.
In addition to paying the legal minimum wage or higher, you’ll need to ensure your pay policies are as fair as possible.
It’s important to remember that waged employees need to be paid for actual hours worked. This means paying employees at least the minimum hourly wage for any extra time worked over an 8-hour day (accounting for meal and rest breaks).
Jill owns a busy urban florist, employing two full-time staff. Jill’s store closes at 6pm each evening, but her staff are required to close the shop, count the money in the cash register, and prepare the shop for the next day. This means her staff usually leave around 6.20pm when the tasks are completed.
Jill pays her staff for an extra 20 minutes each day for the time that is spent closing up because it is over their standard eight hours work per day.
Paying employees fairly also means:
- women and men must receive the same pay rates for doing the same or substantially similar work
- you cannot discriminate on the basis of an employee’s colour, race, ethnic or national origins, gender (including pregnancy or childbirth status), marital or family status, age, disability, religious or ethical belief, political opinion, sexual orientation or union activity.
There is no statutory minimum wage for employees who are under 16 years of age.
A small amount of people hold an exemption from the minimum wage. You can find out more by visiting the Department of Labour’s website’s section on minimum wage exemptions.
If you’re unsure how much you should be paying your employees, or you think you might be paying too little, you can contact the Department of Labour on 0800 20 90 20.