Employers must pay workers a specified minimum hourly rate. There are three minimum wage rates, as set out below.
The adult minimum wage applies to all employees aged 16 and over who are not ‘starting-out workers’ or trainees, and all employees who are involved in supervising or training other employees.
The starting-out wage applies to starting-out workers. These are:
- 16- and 17-year-old employees who have not yet completed six months of continuous employment with their current employer.
- 18- and 19-year-old employees who have been paid a specified social security benefit for six months or more, and who have not yet completed six months’ continuous employment with any employer since starting being paid the benefit. Once they have completed six months’ continuous employment with a single employer, they will no longer be starting-out workers, and must be paid at least the adult minimum wage rate.
- 16- to 19-year-old employees who are required by their employment agreement to undertake industry training for at least 40 credits a year in order to become qualified.
The training minimum wage applies to employees aged 20 years or over who are doing recognised industry training involving at least 60 credits a year as part of their employment agreement, in order to become qualified.
There is no minimum wage for employees aged under 16.
The minimum wage rates are reviewed every year. From 1 April 2019 the adult minimum wage rate (before tax) that applies for employees aged 16 is NZD 17.70 per hour. This will rise to NZD 18.90 per hour on 1 April 2020.
The minimum rate that applies to starting-out workers, and employees on the training minimum wage (before tax) from 1 April 2018 is NZD 14.16 per hour. This will rise to NZD 15.12 per hour on 1 April 2020. The current minimum wage rates can also be found at https://employment.govt.nz/hours-and-wages/pay/minimum-wage/minimum-wage-rates/.
Employees can be paid for overtime worked depending on the terms of the individual employment agreement.
Wages normally have to be paid through basic salary. However, if an employee is provided with board and lodging the employer may deduct the costs of this. If this is not a fixed deduction, the amount may not exceed 15% for board or 5% for lodging.
Bonuses and tips may not be used as a means of paying less than the hourly minimum wage.
The Minister for Workplace Relations and Safety is legally required to review minimum wage rates annually, to take effect on 1 April each year.