The $1.20 increase is a step closer to reaching the anticipated $20 minimum wage by 1st April 2021. This new rate was confirmed after careful consultation with stakeholders such as employers and employee representatives and was confirmed after an annual review taking into account the current economic context and interests of the business and workers.
Be Aware of the Effect
If you have a staff member who is on a salary for a 40-hour working week of close to $39,500 per annum excluding Kiwisaver, then you need to be conscious that they don’t exceed their working hours as that would bring them below the minimum wage. Even if your staff member is happily working the extra hours, or in fact does them by choice, you can still be liable for some hefty fines under the Minimum Wage Act 1983.
The employer’s contribution to Kiwisaver need to be excluded in the minimum pay calculations.
If you are concerned about this pay rise, give us a call on 0508 Achieve to discuss how you can plan ahead for this.