Minimum Wage increased on 1 April 2020
The Government has announced that the adult minimum wage will rise on 1 April 2020 to $18.90 per hour - from the current rate of $17.70 per hour. This means that if you have adult employees earning less than $18.90 an hour, you are legally required to increase their wage rates.
You will need to advise the employee of this and record the change in writing. This means that you should draft a Variation Letter for the employee to sign. One copy should be retained for the employer record and one copy retained by the employee. It is important to keep a record of the change in case you are ever audited by the Labour Inspectors.
The minimum rates apply to all employees whether they work full-time, part-time or casually and whether they are paid a wage for time worked, a salary, partly or wholly on a commission basis, or for what they produce (piece rates).
The minimum adult rate applies to any employee aged 16 years and over unless they are eligible for the 'starting-out' wage or the 'training' wage.
There is no legal minimum rate for employees aged 15 years or younger.
If you have salaried employees, you need to make sure that their total remuneration meets minimum wage requirements for each individual pay period, taking into account any overtime, meetings, or time spent opening and closing stores. If these bring total remuneration below the Minimum Wage rate, you are breaking the law.
The table below summarises the minimum hourly rates and the changes:
|Minimum Wage for:||Employee description||Old minimum rate per hour||New minimum rate per hour from 1 April 2020|
||No minimum applies||No minimum applies|
|All other employees||
Are you wondering what this could mean for your business?
The new minimum wage, will likely put pressure on other wages in your business. There is a number of ways to combat the added cost that wage increases will have on your business. Additionally, there are ways to incentivise employees other than simple pay increases.CHECK OUT OUR ADVICE
Our 2020 Wages Survey is now open!
Your employees are your most valuable assets, and our annual Wages Survey can help you stay up to speed with average wage rates around the country, so you can keep up with the competition, whilst ensuring your employees are rewarded appropriately.
Our Wages Guide is the most comprehensive guide to retail wages in New Zealand and provides up-to-date guidance on average wages rates for 23 retail-specific positions by merchandise, turnover and region.
This year, with the big jump in the Minimum Wage, and the impacts of COVID-19, the information will be more useful than ever.
We need your help to gather the data - and if you take part, you'll get a FREE copy of the report! The price for members who don't participate is $125 (+ GST) and $250 (+ GST) for non-members.
If you have any specific issues about minimum wage or paying your staff, our Advice Service is here to help and can be contacted by email or phone 0800 472 472 (1800 128 086 from Australia).
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Updated 16th June 2020.