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How much to pay and pay rises

As long as an employee’s pay is above the relevant minimum wage and complies with the employment agreement and legislation, an employer can choose how much to pay their employee.

How much to pay employees

An employer cannot pay an employee a different amount based on their: sex (including pregnancy or childbirth status), gender, employee’s colour, race, ethnic or national origins, marital or family status, age, disability, religious or ethical belief, political opinion, sexual orientation, union membership or activity.

Other things to note:

  • An employee must be paid whatever rate agreed to in the employment agreement, as long as it is above the minimum wage rate (if 16 years old or over).
  • There are no set standard or minimum industry wage rates. CareersNZ (external link) has some information about the pay range for many jobs. Unions, industry and professional organisations have useful information, and recruitment sites have market pay rates.
  • Keeping up-to-date and accurate records is a necessary part of paying employees correctly and avoiding disagreements and penalties.
  • The frequency and amount of pay reviews and increases will depend on the employment agreement, workplace policies and in some cases the minimum wage.

Pay rises

An employer doesn’t have a legal obligation to provide a pay rise or conduct a performance review unless this is in an employment agreement or workplace policy. However, it is best practice to regularly review employees' performance and pay.

Rates of pay, salaries, bonuses, review periods and pay rises are all up to employers and employees to negotiate (over and above the level of the minimum wage).

Pay reviews

Pay reviews may be linked to you working to a certain standard or meeting specific performance criteria, or may be linked to service or other criteria. They are often discretionary and the employer may choose not to review an employee’s pay or may review it but decide not to increase it. If you’re on the minimum wage rate, and this rate is increased, then your pay must be increased to at least to the new minimum wage rate from the time the new rate takes effect. If you’re earning above the minimum wage, and the minimum wage rate increases to a level above your wage rate, your pay should be increased to at least the new minimum wage rate.

If an employee is unhappy about their current wage rate, then they can approach the employer and try to negotiate a pay rise. If an employee requests a pay rise, their employer must consider and respond to the request in good faith.

Performance reviews

It is good practice for employers and employees to have some form of performance criteria and feedback system to be in place that both the employer and employee understand. This helps employees and employers to have a shared view of how the employee is tracking against their employer’s expectations and what they need to do to improve.

Impact of working a shift over the start or end of daylight saving, on wages

Daylight saving runs from 2am on the last Sunday in September until 2am on the first Sunday in April each year (except for the Chatham Islands who don’t observe daylight time).

If an employee is working a shift when daylight saving time:

  • starts, which means they work an hour less than they otherwise would have, they must not be disadvantaged (ie they should be paid their pay and allowances for the lost hour)
  • ends, which means they work an extra hour than they otherwise would have, they should be paid for any extra hour worked.

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