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Minimum pay rules

The minimum wage applies to all paid employees aged 16 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.

There are three minimum wage rates:

  • Adult minimum wage
  • Starting-out wage
  • Training minimum wage. 

Adult minimum wage 

The adult minimum wage applies to all employees aged 16 and over who aren’t starting-out workers or trainees, and all employees who are involved in supervising or training other employees. 

This is the minimum wage that is most widely used by Kiwi businesses of all shapes and sizes. 

Starting-out wage 

The starting-out wage applies solely to workers entering the workforce for the first time. 

Starting-out workers are:

  • 16 and 17-year-old employees who haven’t yet completed six months of continuous employment with their current employer.
  • 18 and 19-year-old employees who’ve been paid a specified social security benefit for six months or more, and who haven’t yet completed six months continuous employment with any employer since they started being paid a benefit. Once they have completed six months continuous employment with a single employer, they’ll no longer be a starting-out worker, and need to be paid at least the adult minimum wage rate.
  • 16 to 19-year-old employees who’re required by their employment agreement to undertake industry training for at least 40 credits a year to become qualified. 

Training minimum wage

The training minimum wage applies to employees aged 20 years or over who’re completing recognised industry training involving at least 60 credits in order to become qualified.

Exemptions

A small amount of people hold an exemption from the minimum wage - find out more on the Employment New Zealand website (external link) , and see also:

If you’re unsure how much you should be paying your employees, or you think you might be paying too little, you can contact MBIE on 0800 20 90 20.

The minimum wage rates are reviewed every year. The current adult minimum wage rates (before tax) that apply for employees aged 16 or over are:

  • $15.25 an hour, which is
  • $122.00 for an 8-hour day or
  • $610.00 for a 40-hour week.

The minimum rates that apply to starting-out workers, and employees on the training minimum wage (before tax), are:

  • $12.20 an hour, which is
  • $97.60 for an 8-hour day or
  • $488.00 for a 40-hour week.

Minimum wage rates (external link)   — Employment New Zealand

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 eight-hour day (accounting for meal and rest breaks).

casestudy FairPayForALongerDay

Case study

Fair pay for a longer day

Jill owns a busy urban florist, employing two full-time staff. Jill’s store closes at 6pm each evening, but her staff close the shop, count the money in the cash register, and prepare the shop for the next day. This means they usually leave about 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.

Payment of wages (external link)  - Employment Agreement Builder

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