Minimum wage for salary-earners
Minimum Wage for salary-earners – practical compliance with the law
As you are probably aware the minimum wage has just been increased. The increase is very simple as an hourly rate, as it’s gone from $14.75 to $15.25. Nice and easy.
What isn’t so easy is when you have employees who are on salary and who don’t work standard hours. With the new Employment Standards it is now essential that you keep records of hours that all employees work. This couldn’t be more important than for any employees that are paid close to the minimum wage. You have a duty of care to your employees (and to your business) to ensure they are paid the minimum wage for every hour they work for you.
So what does this mean in practise?
- The minimum full-time annual salary you can pay someone is $31,720 (for 40 hour weeks) or $29,738 (for 37.5 hour weeks)
- So, if you have an employee who is paid less than $32,000 per annum, they can only be working no more than 40.25 hrs in a week. If you need them to exceed this then you must pay them for additional hours and ensure it’s well documented (I would recommend, a contract variation that’s attached to their employment contract).
- Similarly a salary of $34,000 p.a. would mean no more than 42.75 hours in a week without extra pay.