minimum wage rate increases from 2012 to 2022
Advice

Are you up to date with the minimum wage?

By now, you’re likely to be aware that the adult minimum wage in New Zealand has risen to $21.20 per hour.

RightWay

Apr 01, 2022

The adult minimum wage has increased by $7.70 over the last decade - from $13.50 in 2012 to $21.20 in 2022 - as shown in the below graph, with the rate of increase moving from being quite steady to a much sharper incline over the past 4 years.

Minimum Wage Rates Graph

A wage increase leaves business owners with a lot to think about and factor in!

The rates are now the following:

Adult minimum wage – $21.10 per hour
This applies to all employees aged 16 and over who aren’t starting-out workers or trainees, and all employees who are involved in supervising or training other employees.

Starting-out wage – $16.96 per hour
This applies solely to workers aged between 16 and 19 and who are entering the workforce for the first time.

Training minimum wage – $16.96 per hour
This applies to employees aged 20 years or over who are completing recognised industry training involving at least 60 credits in order to become qualified.

 

So what’s the Living Wage we hear about?

The Living Wage emerged as a response to growing poverty and inequality that can hold many employees and their families back. In essence, the Living Wage is the hourly wage a worker needs in order to pay for the necessities of life and to participate as an active citizen in the community. It reflects the basic expenses of workers and their families such as food, transportation, housing, and childcare, and it's calculated each year independently by the New Zealand Family Centre Social Policy Unit.

The Living Wage Movement is not aligned to any political party but seeks to influence those who have the power to change the lives of workers and their families. This is why a number of large publicly-funded employers in New Zealand are encouraged or choose, to pay a Living Wage. Many small and ethical/socially-responsible employers also choose to pay a Living Wage and have become accredited.

An increase to the New Zealand Living Wage hourly rate was announced on 1 April 2022.
From 1 September 2022, the New Zealand Living Wage will increase to $23.65 per hour.  

 

What do you need to think about if you’ve got staff that are on minimum wage?

If you have staff that are on minimum wage, you’ll need to ensure you have increased their pay from 1 April 2022. If you haven’t done this, you will need to backdate the increase to 1 April 2020 – but remember to factor in any variations you might have also made to your employees’ remuneration over the various COVID-19 alert levels. If you have overlooked the increase; work through each employee systematically to calculate the arrears, communicate with your staff, and then make any necessary corrections in your payroll system. If you need to change your staffing as a result, think about how you might handle those conversations with employees and if you need any help to do so.

Top Tip: Businesses who have employees on minimum wage should also be thinking about how the changes are affecting their cash flow. You might decide that you’re going to need to reflect the increase in your pricing or just absorb the cost. This can also be a good time for businesses to think about their systems and processes. Automating some of your processes or finding a more efficient way to do things might mean that you can continue to keep costs down”.

Don't hesitate to contact us if you have any questions or concerns about wages in your business, or anything business related.

 

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