The COVID-19 crisis has caused an economic slump across countries worldwide. Robust economies have toppled. Several people have lost their jobs. The pandemic has catalyzed the fall of several multinational organizations and has led to a magnitude of global job loss comparable to the great depression.

In the midst of all this, the government of NZ has been continuing its endeavors to safeguard the country’s economy and ensure the financial soundness of its citizens. While it has issued several critical notices and plans of action to be followed during alert levels 3 and 4, it has also taken a step forward to ensure its citizens’ workplace satisfaction.

What Are the Latest Steps Initiated by the NZ Government Regarding the Wage Rate of Employees?

The government of NZ was long back planning to increase the minimum wage rate of all the adult employees to $20.00 per hour since 2018. If an adult worker is paid less than the minimum wage rate per hour, the employers are supposed to increase their wages to $20.00 per hour from 1 April 2021. All employers are required to provide a variation letter to their employees so that they are aware of the rate changes. The employers can maintain a recorded copy of the same letter if the Labor inspectors ask for records during the audit process. NZ government had categorized standard minimum wage rates in three sections:

  • Adult minimum wage
  • Starting out wage
  • Training minimum wage

The minimum wage change is subjected to both full-time and part employees in NZ. Also, the rate change is applied to employees hired on a commission basis or hourly basis. There is no minimum rate change in employees who are 15 years or younger. But it is compulsorily required for all employers to pay minimum wage rate to individuals who are 16 years or above. The minimum wage rate is not applicable in the case of adult employees if they are liable for the ‘starting-out wage or training wage.

Labor’s Pre-COVID Commitment

As per the Labor’s pre-Covid commitment, the NZ government is committed to increasing the minimum wage rate by 5.8% from April 2021. The previous Labor government in power already indicated changes in minimum wage three years prior. At the same time, the Minister of Workplace relation confirmed that he could provide details about the following change only after 2022. The amplification in the minimum wage rate will be subjected to 1,75,000 citizens of New Zealand.

This means that an adult employee working on minimum wage for 40 hours a week will earn $44 more every week. The rise in the minimum wage rate in NZ will prove to be beneficial as it will boost the financial system by $216 million. This will provide an opportunity for New Zealanders to increase their expenditure on local companies. Further, this change will also enhance the market productivity needed for the growth and development of businesses.

New Zealand’s Minimum Hourly Wage Rates and Changes Introduced in 2021

Several reforms have been introduced regarding the minimum hourly wage rates. The following list gives you a detailed overview.

  1. There is no change indicated in the minimum wage rate for children aged 15 years or below 15 years
  2. Employees in the age group of 16-19 years were paid $15.12 per hour based on the employment agreement that mentioned all the training program requirements. It compulsorily needed 40 credits every year in 2020. The price will rise from $15.12 to $16.00 from April 2021
  3. The minimum wage rate remained the same for training individuals above the age of 20 years. The wage was the same as individuals training in the age group of 16-19 years
  4. All other workers in the age of 16 years and above were paid $18.90 in 2020 after completing six months in the same company. This wage has risen to $20.00 for all the adult employees. This amendment will come into force from 1 April, 2021

However, if you are confused regarding your eligibility for a specific wage rate, you can contact us. Our amicable experts will be happy to help you. The following tables seek to provide detailed information regarding the wage rates and respective employment types.

Type of Minimum wagePer hour8 hours a day40 hours a week80 hours fortnight
AdultNZ$18.90NZ$151.20NZ$756.00NZ$1512.00
Starting outNZ$15.12NZ$120.96NZ$604.80NZ$1209.60
TrainingNZ$15.12NZ$120.96NZ$604.80NZ$1209.60

Table 1: Minimum wage rate of employees in 2020

Type of Minimum wagePer hour8 hours a day40 hours a week80 hours fortnight
AdultNZ$20.00NZ$160.00NZ$800.00NZ$1600.00
Starting outNZ$16.00NZ$128.00NZ$640.00NZ$1280.00
TrainingNZ$16.00NZ$128.00NZ$640.00NZ$1280.00

Table 2: Minimum wage rate of employees in 2021

Employing School-Age Workers

If a company or organization is employing any individual below the age of 16 years, they should ensure that their work does not hamper the school schedules of NZ employees. Moreover, there is no minimum wage provided to workers who are below 16 years of age.

Exemptions

The NZ government has exempted few people from getting minimum wage. These people are generally the ones who are serving jail terms and some individuals serving the probation period.

Paying Impartially

The NZ government aims to become one of the world’s leading governments that look after their citizens’ well-being and implement reforms proactively that ensure the same. The neutral/impartial payment scheme is one of the best economic and employment reforms that ensure the world’s NZ government’s leading status.

  • Apart from paying the required minimum wages to NZ employees, it is vital to ensure that all the organizations have fair policies and practices. Further, all the workers should be paid according to the actual hours worked on a particular day
  • Gender equality should be maintained by paying the same amount of wage to both men and women for performing the same work
  • Discrimination based on employee’s national origin, face, ethnicity, color, creed, sex, marital status, religion, and disability should not be encouraged at any point in time
  • All the workers are liable to be treated equally irrespective of the role and responsibilities in their job
  • If an employer is unsure about NZ’s pay scales, they should reach out to the New Zealand Employment Services or us for further information

Conclusion

For further information and assistance on employment and minimum wage rate, you can  Book a consultation. All employers need to pay at the least minimum wage to their employees. In this way, the country’s job ecosystem will flourish, and financial wellness will be maintained irrespective of the pandemic situation.