Plan ahead – managing increase in the minimum wage for New Zealand employees

The minimum wage will rise to $18.90 per hour on 1 April 2020 – and Government’s plan for a $20 minimum wage by 2021 is well underway.

An estimated 242,000 workers in New Zealand will benefit by a lift in their income. The new $18.90 rate will mean an extra $48 per week before tax for Kiwis who work for 40 hours on the current minimum wage.

Government advise that they sought to implement a balanced approach to the minimum wage increases and this has provided certainty to businesses so they may know how much the minimum wage will increase and when the changes were to happen.

There may well be pressure on businesses to increase the rates of pay for other employees already on rates above the minimum wage. It is therefore essential that business owners review their cost of sales and business expenses and that they also review the roles of their staff and hours required to ensure that they are able to sustain the increased wage costs.  It is not always possible to lift prices for services and goods to cover such increased costs. We are a nation of SME’s and business owners often work very hard within their businesses as active owner/operators. They deserve to be rewarded well for their effort and expertise also.

Re-published with permission from Clyth MacLeod (2018) Ltd

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