Minimum wage increase effective 1 April 2023

Prime Minister Chris Hipkins has announced that the minimum wage rates will increase from 1 April this year. The adult minimum wage will go up by $1.50, taking the hourly rate from $21.20 up to $22.70 – an increase to keep in line with inflation. The training and starting-out minimum wages will also increase from $16.96 per hour to $18.16 per hour, remaining at 80% of the adult minimum wage.

The Government has said it will review the minimum wage rate again later this year. The Minimum Wage Act 1983 means employees must be paid at least the minimum rate for every hour worked.

What does this mean for you?

If you have staff on minimum wage, talk to whoever runs your payroll system to make sure they’re ready for the changes. Even if you don’t have staff on minimum wage, now is a good time to review their remuneration to ensure you remain competitive. If you do make any changes to wages, recalculate your budgets for the rest of the year.

Employees on minimum wage

• If you have staff on minimum wage, send them a letter or email ahead of 1 April advising of the increase

Other employees

• If you have staff on the starting-out or training minimum wage, now is a good time to check when they’ll be eligible to move to the adult rate
• Do your employment agreements provide for overtime or allowances? If yes, check to ensure the wage increase does not have any impacts on what is specified in the agreement. If it does, you will need to provide affected employees with a variation letter to confirm the change

Need further help with anything minimum wage or remuneration related? Talk to your local Baker Tilly Staples Rodway advisor.