Minimum Wage Change 2022
The NZ Government has announced an increase of about 5.9% to the minimum wage from the current $20.00 per hour to $21.20 per hour. The new rates come into effect on 1 April 2022.
The minimum wage applies to all paid employees aged 16 and older (including migrant workers), although there are different rates if your employee is 16 or 17 and is new to the workforce or if they are completing training. It doesn’t matter if they work full-time, part-time or casually and it also applies if they are paid an hourly rate, a salary, a commission basis, or some sort of piece rate.
For salaried employees, you need to make sure that their total remuneration meets minimum wage requirements for each individual pay period. You need to take into account any overtime, meetings, or other time spent doing work related tasks. It is important that these activities do not bring the employee’s total remuneration below the minimum wage rate.
There is no legal minimum rate for employees aged 15 years or younger.
The new minimum wage rates (before tax) from 1 April 2022:
|Type of minimum wage from 1 April 2022||Per hour||8-hour day||40-hour week||80-hour fortnight|
When there is a wage rate change (or any change to an employee’s terms and conditions of employment) you need to advise the employee of this, and record the change in writing e.g., a variation of employment letter that is signed by both the employer and the employee. As with all employment documentation, you need to keep a signed copy of the change in your records and the employee also gets a copy. It’s important to keep these records for at least six years because they may be required if you are audited by the Labour Inspectors.
General pay requirements
New Zealand’s employment law requires you to:
- Pay at least the minimum wage
- Legally pay employees in cash, unless you’ve agreed another method in writing, e.g., their employment agreement
- Pay employees as frequently as agreed in their employment agreement
- Get their consent in writing to change the day or frequency they get paid
- Pay annual holiday leave to staff before they go on leave, unless otherwise agreed in writing, e.g., in their employment agreement
- Keep accurate records of all payments for at least six years.
If you have any queries at all about the payment of wages or other employment related matter please do not hesitate to contact ConsultingHQ.