Employees – New Entrants and the Minimum Wage

Changes to the Minimum Wage as of 1 April 2008

If you are 16 or 17 years of age, then changes to the Minimum Wage Act 1983 and minimum wage rates which came into force on 1 April 2008 may affect you.

On 1 April 2008 the youth minimum wage was replaced by a minimum wage for new entrants, which applies to some employees aged 16 or 17 years.

There is no statutory minimum wage for employees under 16 years of age.

Who is a New Entrant?

A new entrant is an employee who:

• is 16 or 17 years of age; and
• has not completed 3 months or 200 hours of employment, whichever is the shorter; and
• is not supervising or training other workers; and
• is not subject to the minimum training wage.

The new entrants minimum wage rate has been set as $9.60 an hour before tax as of 1 April 2008. That’s $76.80 for an eight hour day, and $384 for a 40 hour week.

The adult minimum wage applies to a 16 or 17 year old employee who is not subject to the minimum training wage, if they:

• have completed 3 months or 200 hours of employment, whichever is the shorter; or
• are supervising or training other workers.

The adult minimum wage rose to $12.00 an hour before tax as of 1 April 2008. That’s $96 for an eight hour day, or $480 for a 40 hour week.

How do I know if I have completed 3 months or 200 hours of employment?

Any employment undertaken before your 16th birthday does not count towards the 3 months or 200 hours of employment.

The 3 months or 200 hours includes employment undertaken before 1 April 2008 provided you were 16 or 17 years of age at the time of that employment. The 3 months or 200 hours also includes employment undertaken with different employers.

However if you work for more than 1 employer during a month, then you will only have completed 1 month of employment. For example, if you worked for 2 employers in May 2008, then this only amounts to 1 month (not 2 months) of employment.

If you are uncertain about how many hours you have worked, ask your employer. You can also check your pay slips to see if you have worked 200 hours or more.

You can also ask your employer to provide you with a written statement about the number of hours or the period over which you have worked. A sample statement is provided on http://ers.govt.nz/pay/newentrant.html

“Supervising or training other workers”

You will not be a new entrant if you are supervising or training other workers. This means that, provided the minimum training wage does not apply to you, if you are 16 or 17 years of age and supervising or training other workers, you would be entitled to be paid at least the adult minimum wage rate as of 1 April 2008, regardless of how long you have been employed or the number of hours you have worked.

There is no legal definition of “supervising or training other workers”. Who is considered to be a worker supervising or training other workers will depend on the facts of each individual situation.

In general, if an employee is 16 years of age or older and is overseeing the performance of another employee, or instructing another employee in the performance of their job it is likely he or she will fall within the category of supervising or training other workers. It is not necessary for an employee to have direct line management responsibility for other employees in order to qualify as an employee who is supervising or training other workers.

To fall within this category, the role of supervising or training would need to be a part of that person’s job, not a one-off event.

What is the minimum training wage?

The minimum training wage applies to people who are required by their employment agreements to undertake recognised industry training involving at least 60 credits a year. You will not be a new entrant if you are a trainee who is subject to the minimum training wage.

The minimum training wage rate rose to $9.60 an hour before tax as of 1 April 2008. That’s $76.80 for an eight hour day, and $384 for a 40 hour week.

These changes only affect the minimum rates of pay. Employers and employees may agree that the employees will be paid more than the minimum wage rates. You cannot agree to be paid less than the relevant minimum wage.

An employee being paid less than the relevant minimum wage can contact a Labour Inspector, who may investigate and act to recover any money owed. Employees can also get help from the Department of Labour’s Mediation Service.

Examples

Some examples are provided below of how the changes to the Minimum Wage Act and minimum wage rates apply in certain situations.

Example 1

Andrew is 17 years old and has been employed at a cafe since 1 August 2007. Andrew is not a trainee and does not supervise or train other workers. He regularly works 10 hours per week. His current rate of pay is $9.50 an hour before tax. By 1 April 2008 he would have worked for 8 months and also completed 360 hours of employment. Since 1 April 2008 Andrew would be entitled to be paid at least the adult minimum rate of $12.00 an hour before tax.

Example 2

Kate is 15 years old. She has worked at a Garden Centre for two years. She works 10 hours per week at the Centre. Kate is not a trainee and does not supervise or train other workers. Kate will turn 16 on 1 May 2008. Her current rate of pay is $8.00 an hour before tax.

The changes to the Minimum Wage Act and minimum wage rates came into force as of 1 April 2008. On 1 May 2008 Kate will be a new entrant because she will be 16 years old and have worked less than 3 months or 200 hours at the Garden Centre since turning 16. As a new entrant she must be paid at least $9.60 an hour before tax.

On 1 August 2008 Kate will have worked three months at the Garden Centre since her 16th birthday, and will have completed 130 hours of work. Although she will not have completed at least 200 hours of employment, she has worked 3 months at the Garden Centre since her 16th birthday (May 2008 – August 2008). Therefore since 1 August 2008 she would be entitled to the adult minimum rate of $12.00 an hour before tax.

Example 3

Shane is 16 years old and studies at Polytech. He turned 16 on 1 February 2008. He has worked a newspaper round every summer since he was 14. Shane is employed to work 2 hours per day, 5 days a week in the summer holidays (December – February). His current rate of pay for delivering newspapers is $9.00 an hour before tax. He does not train or supervise other workers as part of his job. By 1 April 2008 Shane would have worked over 3 months and 200 hours delivering newspapers. However he has only worked 1 month (40 hours) delivering newspapers since he turned 16.

Shane also started work at his local Video Store on 1 February 2008. His current rate of pay at the Store is $9.50 an hour before tax. He works 20 hours per week at the Store and is not a trainee and does not supervise or train other workers. By 1 April 2008 Shane would have worked for 2 months (160 hours) at the Video Store since his 16th birthday.

The changes to the Minimum Wage Act and minimum wage rates came into force as of 1 April 2008. Since he turned 16 years of age, Shane would have worked on the newspaper round in February (1 month of employment) and at the Video Store in February and March (2 months of employment). Therefore he has worked 2 months since he turned 16. Although he worked for 2 employers in February, this only counts as 1 month of employment. Shane would not have completed 3 months of employment, but Shane has worked a total of 200 hours from both jobs since turning 16 years of age (40 hours delivering newspapers + 160 hours at the Video Store). By 1 April 2008 he would have completed at least 200 hours of employment. Therefore since 1 April 2008 Shane would be entitled to be paid at least the adult minimum wage of $12.00 an hour before tax in both his jobs.

Example 4

Tasha is 15 years old. She turns 16 years on 1 August 2008. She works in the checkout department at her local supermarket and has done so since she was 14 years of age. Tasha works at the supermarket for 10 hours per week. Her current rate of pay is $11.00 an hour before tax.

As part of her role Tasha trains and supervises new employees at the checkout.

The changes to the Minimum Wage Act and minimum wage rates came into force as of 1 April 2008. These changes would affect Tasha as she is younger than 16 years of age and therefore the minimum wage rates do not apply to her.

On 1 August 2008 Tasha will turn 16 years of age. Because she trains and supervises other employees Tasha will be entitled to be paid at least the adult minimum wage rate of $12.00 an hour before tax when she turns 16.

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