Retention tools and some risks

The adult minimum wage increased to $22.70/hour on 1 April 2023.

This is a significant increase, up from $21.20, and aligns with the 7.2% rate of CPI inflation in the year to 31 December 2022.

Also increased on 1 April were the training and starting-out minimum wage rates that are increased to $18.16/hour; this is 80% of the adult minimum wage.

For an employee who works 40 hours/week, the minimum wage rise to $22.70/hour means they earn an additional $60 each week before tax.

The government says it will review the minimum wage rate later this year.


Renew your employees’ pay rates

If you haven’t done so already, you should review your employees’ pay rates to ensure you are compliant with the new minimum wages. For employees on a wage this is a straightforward process as you only need to ensure that their wages are at least $22.70/hour.

This is not the case for all employees, however, as it includes those on a salary whose current pay rates may be sufficient when they work overtime.

During busy times, salaried employees often work hours over and above their regular employment agreement hours. You should check the pay of these employees every pay period to ensure their pay divided by the actual hours they worked meets minimum wage requirements. If not, your employee’s pay must be topped up to at least the minimum wage, regardless of whether any term in their employment agreement says otherwise.

Failing to keep accurate time records could lead to a penalty under the Employment Relations Act 2000 or Holidays Act 2003.

You should also take the opportunity to ensure your time recording systems are accurate. 


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Content Copyright © NZ LAW Limited, 2023. Editor Adrienne Olsen, e.  m. 029 286 3650