Minimum wage increase

New Zealand's lowest paid workers will receive a 5.9% pay increase from 1 April, following changes to the minimum wage announced today by Labour Minister Margaret Wilson. "These changes affect nearly 30,000 people who earn the lowest wages in New Zealand. The economy is going well and the labour market is tight, so now is the time to help those at the bottom and to encourage people to join the workforce.

"It is important that minimum wage rates remain high enough to provide a realistic incentive to work, relative to a benefit. The increase in the minimum wage will also complement changes to be announced in the Budget designed to ensure that families with dependent children are always better off when in work.

"We believe we have made a balanced choice that maximises benefits for low-income workers while minimising negative impacts for employers," Margaret Wilson said.

The minimum adult wage will move from $8.50 an hour to $9.00 an hour in a move designed to keep minimum wages in proportion with the average wage, and to ensure that the minimum wage rate continues to provide an incentive to work for those currently on benefits. The minimum adult wage applies to all workers aged 18 and over.

The minimum youth wage will also increase, to keep it at 80% of the adult minimum wage. The minimum hourly rate for workers aged 16 and 17 will move from $6.80 to $7.20. The minimum training wage, which is set at the level of the minimum youth wage, will move at the same rate.

The increases will directly affect just under 20,000 adult workers, less than 1.5% of the adult working population. Around 7,000 young workers will be directly affected by the increase in the minimum youth wage.

There will be more publicity about the changed rates closer to 1 April. Employers and employees can also contact Employment Relations Infoline 0800 800 863 for more information. The website www.ers.dol.govt.nz will have information as it becomes available, and it is also possible to register through the site for updates on employment relations issues.

ENDS

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