Minimum Wages per fortnight
The government is proposing an interim measure to remedy a potentially massive problem for businesses in New Zealand off the back of some recent Court rulings. The Minimum Wage Act and accompanying Minimum Wage Order currently indicate that an annual salary cannot be averaged for the purposes of determining whether it is above the Minimum Wage, beyond a week. In a recent case, a Board of Trustees was found to be in breach of the Minimum Wage Act because they did not specifically pay their salaried teachers $14.25 for each hour over 40 that they worked in a week. Essentially, the Court’s ruling dismantles the “swings and roundabouts” principle that underpins the idea of annual salaries and effectively loads extra cost onto every week a worker’s hours exceed 40 - irrespective of the amount of the worker’s annual salary! The Canterbury Employers Chamber of Commerce has issued a briefing note that describes the problem in detail
I encourage each of you to support the government’s proposal to amend the Minimum Wage Order 2014 to limit the effects of these rulings in the interim by allowing fortnightly averaging; and also to encourage the government to amend the Minimum Wage Act to permit averaging of remuneration over a year, provided that the average does not fall below the Minimum Wage rate.