There are three different types of minimum wage rates: adult, starting-out and training.

Adult minimum wage

The adult minimum wage applies to all employees aged 16 years and over who are:

·         not starting-out workers or trainees, or

·         involved in supervising or training other workers. What this means will depend on each individual situation. For example, it would usually include an employee overseeing the performance of another employee, or instructing another employee in the performance of their job; the employee doesn’t have to have direct line management responsibility for other employees. The supervising or training needs to be a part of that person’s job, not just a one-off event.

Starting-out minimum wage

The starting-out minimum wage applies to workers who are:

·         16- and 17-year-old employees who haven’t done six months of continuous employment service with their current employer. After six months with one employer they are not starting-out workers and must be paid the adult minimum wage

·         18 and 19 year old employees who have been paid one or more social security benefits for six months or more, and who haven’t completed six months’ continuous employment with an employer since they started being paid a benefit.Specified security benefits include:

·         domestic purposes benefit

·         emergency benefit

·         independent youth benefit

·         invalid’s benefit

·         jobseeker support

·         sickness benefit

·         sole parent support

·         supported living payment

·         unemployment benefit

·         widow’s benefit

·         young parent payment and youth payment.

·         16- to 19-year-old employees whose employment agreement states they have to undertake industry training for at least 40 credits a year in order to become qualified in the area they are working in.

If an employee is supervising or training other workers, then the starting-out minimum wage doesn’t apply and they must be paid at least the adult minimum wage.

Calculating six months of continuous service

Six months of continuous employment with an employer is calculated for the next six calendar months from the employee’s first day of work; the number of hours per week the employee works is not relevant.

Calculating whether or not an employee has completed six months of continuous service must include any time:

·         the employee was employed by their employer before they turned 16

·         on leave (paid or not).

If the employee moves to a new employer, they’ll be a starting-out worker again for the first six months; this applies with each new employer until they reach the maximum age.

Training minimum wage

The training minimum wage:

·         applies to employees aged 20 years or over whose employment agreement states that they have to do at least 60 credits a year of an industry training programme to become qualified in the area they are working in. Many of these employees will be apprentices(external link). An apprentice has the same minimum rights and protections under employment law as any other employee but may be paid the training wage

·         doesn’t apply to employees who are being trained at work, for example, by their employer at the start of their employment; it only applies to employees doing an approved industry training programme

·         doesn’t apply to an employee who is supervising or training other workers. These employees must be paid at least the adult minimum wage.

Reference: https://www.employment.govt.nz/hours-and-wages/pay/minimum-wage/different-types-of-minimum-wage-rates/

Penny Varley

Payroll Administrator