information for people working in 'sheltered' employment

A change in the law affects people who are employed in sheltered workshops. This fact sheet describes the law change, and the new employment rights of people with disabilities.

What has changed?

The government has repealed the law that allowed sheltered workshops to treat disabled people differently from other people. This law was called the Disabled Persons Employment Promotion Act.

Since December 2007, people who work in sheltered workshops have the same employment rights as people in other workplaces. This includes the right to real wages, paid public holidays, paid annual leave and paid sick leave.

The law change means that you must be paid at least the minimum wage, unless you have a minimum wage exemption permit. These permits are only given if you and your employer agree there is a good reason why you should be paid less than the minimum wage.

What is a minimum wage exemption permit?

Every employer has to pay at least the minimum wage unless an employee has a minimum wage exemption permit. (The minimum wage is $12.00 an hour before tax for employees aged 16 and over, except for new entrants and employees subject to the minimum training wage as of 1 April 2008. The minimum wage for new entrants and the minimum training wage is $9.60 an hour before tax as of 1 April 2008).

Your employer can apply for an exemption permit if you both agree there is a good reason why you should be paid less than the minimum wage. 

The permits are issued by Labour Inspectors from the Department of Labour. Before a Labour Inspector will issue a minimum wage exemption permit, they will make sure that:

• Your disability really stops you from earning the minimum wage
• You have been given the opportunity to have an independent support person or advocate with you when you are talking about your wages with your employer
• The work is suitable for you and you get appropriate supervision and training
• You are offered a written employment agreement that meets all employment rights, such as paid holidays and sick leave, and adequate health and safety conditions (except minimum wage)
• The wage rate relates to your ability to do the work
• The wage is consistent with the wages paid to other people whose circumstances are similar to yours, and who have exemptions
• Your employer has done everything they can reasonably be expected to do to help you do the job well

Labour Inspectors will not issue a minimum wage exemption permit unless they are sure that the wage rate is fair and that you agree with it.

What happens if I am a union member?

If you are a union member with a minimum wage exemption permit the union has to agree to you being paid at the rate stated in your permit, rather than at the pay rate in the collective agreement that covers you.

What does this law change mean for people with disabilities and sheltered workshops?

Some people in sheltered workshops might get paid more. As a result, sheltered workshops might have to run their businesses differently. But it does not mean that they will have to close.

There are lots of different people in sheltered workshops, so the changes will affect them in different ways. Some people might decide they want to get a job somewhere else. Some people might like being in sheltered workshops and will want to stay there and work.

Some people might stay and work in sheltered workshops and be paid less than the minimum wage because they can get a minimum wage exemption permit.

The repeal of the Disabled Persons Employment Promotion Act will not change the rules about benefits. However, if you are paid a benefit from Work and Income and your wage increases, or if your hours change, then the amount you are meant to get from Work and Income may change as well. If your wage or hours of work change, please let Work and Income know.

If your job in a sheltered workshop stops, then Work and Income will work with you to make sure you receive your full and correct entitlement, as well as help you look for another job.

Where can I get help or more information?

Contact the Department of Labour through our website www.dol.govt.nz or call 0800 20 90 20 during business hours.

Contact Work and Income by calling 0800 559 009 or by emailing information@msd.govt.nz .

This fact sheet is a guide only and may not be accurate for all situations. It should not be used as a substitute for legislation or for legal or other expert advice.