Gearing up for the minimum wage boost

New Zealand already boasts one of the highest minimum wages in the world and this year more than 200,000 Kiwi workers will benefit from an extra $48 a week in the biggest boost to the minimum wage in its history.

The minimum wage rate will rise from $16.50 an hour to $17.70, taking effect on 1 April this year, Workplace Relations Minister Iain Lees-Galloway announced in December.

While the Government, unions, and activists say the costs of minimum wage hikes are negligible, small business will feel the greatest impact. Senior Employment Relations Adviser Gabrielle Findlay at workplace specialist firm, Employsure says it’s easy for Government and the unions to say the impact is inconsequential but it is small and medium businesses who struggle to offset those costs: “The cost of doing business becomes more challenging as wage increases are introduced. Small business employers often need to reduce the number of staff to keep up with rising costs, increase their prices, or work more hours themselves,” she said.

According to Findlay, not all employers will be required to increase employees’ wages,“Provided the rates currently paid are above the increased minimum wage, you are not required to increase employees’ wages,” she said. However, “If employers pay at the current minimum wage rates, they should start forecasting the increase to their wages bill, and increase pay only from 1 April 2019.”

What will the new Minimum Wage rates be?

Effective 1 April 2019, the minimum wage is mandatory to be paid to an employee irrespective of the hours worked or job responsibilities are as follows:

Adult Minimum Wage – $17.70 Per Hour.

This wage is the most commonly used by kiwi businesses and applies to all the employees who are 16 years of age or older, provided they are not involved in training or supervising other employees.

Starting-Out Wage – $14.16 Per Hour.

Workers aged 16-19 who are entering the workforce for the first time.

Training Minimum Wage – $14.16 Per Hour.

This category of wage applies to employees aged 20 years or over who are completing recognised/accepted industry training involving at least 60 credits in order to become qualified.

“Being fully aware of the wage increases is something that is vitally important to running a business. Employees have to be paid at least the minimum hourly wage rate for every hour worked,” says Findlay.