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Minimum Wage heads up

After the government increased the minimum wage rates earlier this year, it made a further amendment to theMinimum Wage Order, issuing a new fortnightly rate. The fortnightly rate is$1,140 for adult employees and $912 for starting-out workers and trainees. Ifyou’re an employer already fully compliant with minimum wage requirements andyour employees’ hours don’t vary from week to week, stop reading here. For you,nothing has changed.

Some farmers have had difficultieswith minimum wage compliance as farming hours vary considerably over busyperiods such as lambing and calving through to quieter periods. Traditionallymany have agreed with their employees to average wages out over quiet and busyperiods so employees have some certainty about their income. Two recent cases,followed up by a Position Statement from MBIE, have made it clear that suchaveraging breaches the Minimum Wage Act unless an employee receives at leastthe minimum wage relevant to his or her basis of payment: hourly, daily, weeklyand, now, fortnightly. The fortnightly rate applies to anyone paid on thatbasis or on the basis of a longer period, so it applies to those on annualsalaries.

This means that, for employees onan annual salary, the longest period over which an employer can average anemployee’s wages is a fortnight. If, during a busy fortnight, employees haveworked more than a total of 80 hours, you'll need to pay them at least $14.25(at current rates) per hour for each hour over 80. Since farmers often usefortnightly rosters, this represents an improvement over the necessity to limitthe averaging to the period of one week (the maximum averaging period permittedbefore the law change).

Talkto us if you think this affects your business.


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