Minimum wage increase

On 1 April 2019 the minimum wage rose from $16.50 to $17.70 per hour. The minimum starting out and training wage also rose from $13.20 to $14.16 per hour. Employers who previously paid at the minimum wage need to increase the wage rates they are paying or face an action for unpaid wages and potentially a penalty from a Labour Inspector from MBIE.

Employers who pay slightly above the new rate should also be mindful of unpaid activities or tasks their employees are required to do; for example, changing into and out of uniforms or PPE or attending unpaid meetings and training sessions. Recent case law, such as the Smith City case, has shown a trend towards these types of activities being found to be ‘work’ for the purposes of the Minimum Wage Act 1983. Where minimum wage employees are expected to do unpaid work they are effectively paid less on average than the minimum wage. Employers with employees in this situation may be in breach of section 6 of the Minimum Wage Act 1983. While some employers may have previously had a ‘buffer’ for these types of issues, this significant increase in the minimum wage may result in this unpaid ‘work’ causing the employer to fall below minimum wage. This change might be a good opportunity for employers to examine their compliance with minimum wage.

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