The Prime Minister has announced that the adult minimum wage will be rising to $22.70 per hour from 1 April 2023.
This is an increase of $1.50 per hour from the current hourly rate of $21.20.
The training and starting-out minimum wages will also both increase to $18.16 from the current rate of $16.96 per hour, which is 80% of the adult minimum wage.
What is the current minimum wage in New Zealand?
Effective 1 April 2022, the minimum wage rate in New Zealand is $21.20 per hour. If you have adult employees earning less than minimum wage, you are legally required to pay the minimum wage.
When there is a wage rate change, you need to advise the employee of this, and record the change in writing. For this, we recommend the Variation Letter for your employee to sign. After signing, you should keep one copy for your records, and give the other to your employee. It’s important to keep a record because you’ll need to show it to Labour Inspectors if you’re ever audited.
The minimum rates apply to all employees. It doesn’t matter if they work full-time, part-time or casually. It also applies if they are paid an hourly rate, a salary, a commission basis, or some sort of piece rate.
There is no legal minimum rate for employees aged 15 years or younger, but you need to pay the adult minimum wage to all employees aged 16 and over unless they are eligible for the ‘starting-out’ wage or the ‘training’ wage.
If you have salaried employees, you need to make sure that their total remuneration meets minimum wage requirements for each individual pay period. You need to account for any overtime, meetings, or time spent opening and closing stores. If these activities bring total remuneration below the minimum wage rate, you’re breaking the law.
What are New Zealand’s minimum hourly wage rates?
|Minimum Wage for:||Employee description||New Minimum rate per hour from 1 April 2023|
|Children||Aged 15 years or under.||No minimum applies.|
|Starting-out Wage||16 and 17-year-olds, first six months with a new employer, not training or supervising others.|
16 to 19-year-olds on an Employment Agreement specifying the requirement of an industry training programme involving at least 40 credits a year, not training or supervising others.
18 and 19-year-olds, previously on a benefit for six months or more, not yet completed six months’ continuous employment with any employer, not training or supervising others.
|Training Wage||Aged 20 and older on an industry training programme involving at least 60 credits a year.||$18.16|
|All other employees||All other employees, including 16 and 17-year-olds after six months of employment with the same employer.||$22.70|
What if I can’t afford to increase pay rates for my employees?
See our advice for ways to try and manage rising wage cost.
If you are a Retail NZ member and have any specific issues around minimum wage rising or paying your staff, our Advice Service is here to help and can be contacted by email or phone 0800 472 472 (1800 128 086 from Australia).
Did you know that you need to notify your employees in writing if there is a wage rate change? Retail NZ members get free access to the letter template and they can get in touch with our advice service free of cost if they need clarification. Not a Retail NZ member yet? Click here to learn more about joining our supportive Retail NZ community.
With Retail NZ’s Wages Guide, you get up-to-date guidance on average wages rates for 23 retail-specific positions by merchandise, turnover and region.
Every retailer who completed the 2022 survey has been sent a FREE copy of the guide. If you think your business took the survey and you haven’t received yours, please email [email protected].
If you didn’t take part in the survey, the Retail NZ Wages Guide is available for purchase for $150 (plus GST) for members and $300 (plus GST) for non-members. To purchase the Retail NZ Wages Guide, or learn more about the guide, click here.