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Payroll team update

Agricultural Industry - Minimum Wage and Employment Agreements 

The‘hot topic’ in the agricultural industry about the minimum wage and employmentagreements is still a moving target however, the Ministry of Business,Innovation & Employment (MBIE) have released their Position Statement onthe Minimum Wage and Employment Agreements in the Agricultural Industry. Of the44 farms visited by the MBIE between December 2013 and April 2014, 31 were in breach of minimumemployment rights! 

SO – How much do I pay my employee? 
  • Atleast the relevant minimum wage currently $14.25, and must be paid for EACHHOUR WORKED on the farm, and CANNOT BE ANNUALISED 
  • Mustbe paid their wages in money, and cannot be paid through other non-cashbenefits, EXCEPT if they agree to deductions from their wages before payment,including for the provision of accommodation or other goods or services 
ANDyou must record all hours worked, wages payable (and paid), and leave taken.    

HOT OFF THE PRESS! - Effective from 26 June 2014 theMinimum Wage Order has been amended so that calculations for those paidfortnightly can now be over two weeks, not one!

Here are some working examples ofcalculations for a farm employee: 

TOTAL REMUNERATION PACKAGE

Basesalary $35,880pa divided by 52 = $690 per week *
Accommodation$6,240pa divided by 52 = $120 per week
KiwiSaver Employer 3% (based on salaryonly*) $1,076.40pa = $20.70 per week
=TOTAL REMUNERATION PACKAGE $43,196.40 per annum
*Accommodation is exempt from KiwiSaver, HOWEVER you must contact the IRDand ‘tag’ the employee for the year otherwise you will receive notificationthat you are under-calculating your KiwiSaver amounts. 

Relevant Daily Pay (RDP) =total gross earnings divided by number of days worked in a week
Baseon a roster of 6 days on and 1 day off = Base salary $690 + accommodation $120
= total gross earnings $810 $810divided by 6 = RDP $135. 

Minimum Wage Act
Taketotal gross earnings $810 and divide by minimum wage $14.25 = 56.84 hoursmaximum hours per week
EITHER caphours at 56.75 per weekor payextra for any hours over the 56.75.    

Our payroll team are here to help you, so please contact us if you would like us tocheck your employee’s calculations!


 

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