Minimum Wage Increase Amid COVID-19 Alert Level 4
On 1 April 2020, the adult (employees 16 years and over) minimum wage rate increases by $1.20 from $17.70 to $18.90 per hour. With the starting-out and training minimum wage rates increasing 96 cents from $14.16 to $15.12 per hour.
The minimum wage increase is occurring while New Zealand is at COVID-19 Alert Level 4, which will potentially create challenges for some employers (i.e financial difficulties, not being able to access payroll systems to update etc).
The following information, outlines yours/your employees rights and how to process this. For further information please head to Employment NZ’s website.
People who are working throughout this lockdown period, must be paid at least the minimum wage for the work they do
This means employees - regardless of whether they are working from home, or from premises to do essential work - must be paid at least the new minimum wage for each hour they work.
If a business can’t process the wage increase at this time
It is recommended to openly and honestly communicate this to their employees. As soon as they are able to, the minimum wage increase will need to be backdated for any hours that were worked.
If no work is being performed (non-essential, can’t work from home), and you have applied/received the wages subsidy for your employees this requires you to retain the employees you receive the subsidy for and if possible, pay at least 80% of their Pre-COVID-19 income.
For workers on the minimum wage, this means they could receive less pay than they previously did, even when the minimum wage has increased. This is because there is no requirement for employers to pay the minimum wage, if no work is being performed.
The employee will begin earning the minimum wage if/when they begin working again for the company after the lockdown.
Feel free to get in touch with us at Sass, if you are unsure.