The adult minimum wage is going up from $14.75 an hour to $15.25, with the starting-out and training rates rising too. Here’s what you’ll need to know for your business.
When: 1 April 2016
What: The new minimum wage rates are:
- Adult — $15.25 an hour
- Starting-out — $12.20 an hour (up from $11.80)
- Training — $12.20 an hour (up from $11.80)
- Starting-out and training minimum wages are 80% of the adult minimum wage.
Read our Minimum pay page for a summary of who can earn the different rates.
Why: Government must by law review these pay rates every year.
What you’ll need to do: You and your staff can agree to any wage above the minimum rate that’s most appropriate to them. You’ll also need to update your employment agreements to reflect any wage changes.
If you pay any of your staff the minimum wage, you may need to amend their employment agreements to reflect the new rate. Use the Employee Cost Calculator to get an idea of how much the increase will cost your business. You can also use the calculator to estimate costs of hiring a new employee.
If you pay any staff minimum wages, recalculate your budget for the rest of the year to account for the increased wages.
Fair pay: In addition to paying the minimum wage or higher, you’ll need to make sure your pay policies are as fair as possible. Pay your staff for actual hours worked — that’s at least the minimum hourly wage for any extra time worked over an eight-hour day (excluding meal breaks).
The new law introduced other rules to make employment practices fairer. They include:
Agreed hours of work — Employers can no longer offer “zero-hour” contracts. You must agree hours of work with each employee and put the details into their employment agreement. You also can’t require employees to be available for work above those agreed hours without a genuine reason and reasonable compensation.
Find out more in our article on hours of work.
Cancelled shifts — Employers can’t cancel a shift without giving workers reasonable notice or reasonable compensation.
Find out what this means for your business in our article on shift cancellation.