Rising Minimum Wage: 1 April 2021

Tomorrow the minimum wage in New Zealand will rise from $18.90 to $20 per hour, with the starting-out and training minimum wages will also rise to $16 per hour (remaining at 80% of the minimum adult wage).

Whilst this was stated as a clear commitment in the general election, there has been resistance to the rise on the basis that the border is still closed, COVID is still lurking in the corners and we are months away from the general population being vaccinated.  This sentiment was echoed by The Ministry of Business, Innovation and Employment who advised delaying the increase until October 2021 and reducing the uplift by 25 cents due to the economic uncertainty caused by COVID.

However, the government has stuck to their election promise and here we are – so – here is a checklist of things to consider:

1. Review those who are affected or may be affected. Remember to look at people beyond casual employees – you must ensure that you look at all employees on lower salaries to ensure that you are not underpaying them come 1 April.

2. Advise those affected of the change.

3. Confirm to those affected via a variation of employment agreement (email or letter is sufficient)

4. Check your payroll systems to ensure they are updated.

5. If any of your employees are on starting-out or training wages, now is a good time to check when they will be eligible to move onto the adult rate.

6. Check on employees on starting out or training wages to make sure you know when they need to be adjusted to the adult wage.

Contact us if you have any questions regarding this change.