Newsflash – Starting-Out Wage Legislation

From 1ST May the new “starting-out wage” legislation is an option for employers and employees.

This new legislation gives employers a real incentive to hire young people and is aimed at giving them an opportunity to join the employment ladder. The starting-out wage sits alongside other government initiatives aimed at helping more young New Zealanders into work or training, including Work and Income’s Job Streams.

The starting-out wage replaces the new entrants wage and training minimum wage for under 20’s.

Employers paying their employees the new entrants’ wage rate before 1 May 2013 can continue to do so until their employees have completed the lesser of 200 hours or 3 months continuous employment. After this time their employees will be eligible for at least the adult minimum wage.

Trainees aged between 16-19 years old who were on the training minimum wages before 1st May will continue on the same wage rate.

There are three groups are eligible for the starting-out wage:

  • 16 and 17-year-old employees who have not yet completed six months of continuous employment with their current employer (or until they are training or supervising others).
  • 18 and 19-year-old employees who have been paid a specified social security benefit for six months or more, and who have not yet completed six months continuous employment with any employer since they started being paid a benefit (or until they are training or supervising others).
    After completing six months continuous employment with a single employer, they will no longer be a starting-out worker and must be paid at least the adult minimum wage rate.
  • 16 to 19-year-old employees who are required by their employment agreement to undertake industry training for at least 40 credits a year in order to become qualified for the occupation to which their employment agreement relates (or until they are training or supervising others).

The adult minimum wage is $13.75 per hour so under the “starting-out wage”, eligible 16 to 19 year olds can be paid 80 per cent of the adult minimum wage ($11.00 per hour) for six months OR for as long as they are undertaking recognised industry training of at least 40 credits per year.

The starting-out wage is not compulsory so employers and employees may agree to any wage rate as long as it is not LESS than the starting-out minimum wage rate.

For more information on the “starting-out wage” go to www.dol.govt.nz

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Tanya Gray highly driven individual, passionate about helping business owners understand and enjoy the recruitment process.

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