Employers
Setting pay, pay reviews and pay rises
An employee’s pay is set by agreement between the employee and the employer – as long as it's at least the relevant minimum wage and meets the requirements of the employment agreement.
Your duties when setting pay
You must:
- negotiate with your employee in good faith to agree on the rate of pay, and include the agreed rate in their
employment agreement A written document setting out the terms and conditions of employment agreed by the employer and employee (also known as a ‘contract of service’). It can include other contractual documents and agreements made by the employer and employee. Every employee must have a written employment agreement.
- pay employees whatever rate has been agreed to, and this rate must be at least the current
minimum wage rate if they are aged 16 years or overThe lowest amount an employee can be paid per hour. There are 3 types of minimum wage: adult, starting-out and training. There is no minimum wage for employees younger than 16 years old.
- pay wages in money, not through other non cash benefits (except for deductions from wages agreed by an employee for accommodation or other goods or services)
- keep accurate records of hours worked, wages payable (and paid), and leave taken.
You cannot pay an employee a different amount based on their:
- gender
- skin colour, race, ethnic or national origins
- marital or family status (including pregnancy or childbirth status)
- age
- disability
- religious or ethical beliefs
- political opinion
- sexual orientation
union membership or activity.An organisation that supports and advocates for employees in the workplace. Unions bargain for collective agreements and help employees with information and advice about work-related issues.
CareersNZ has information about the pay range for many jobs.
CareersNZ(external link)
Pay reviews
There is no legal obligation to review an employee's pay.
If you do review pay, you can link it to specific performance criteria. You can also review pay and decide not to increase it, if it is at least the relevant minimum wage rate.
If an employee is unhappy about their current wage rate, they can ask you for a pay rise. You must consider and respond to the request in An underlying principle in employment law which requires employers and employees to deal with each other honestly, openly, and in a fair and timely way.
Pay rises
You do not have a legal obligation to provide a pay rise or conduct a performance review unless it is in an A written document setting out the terms and conditions of employment agreed by the employer and employee (also known as a ‘contract of service’). It can include other contractual documents and agreements made by the employer and employee. Every employee must have a written employment agreement. Workplace policies and procedures explain the rules and expectations in the workplace.
- rates of pay
- salaries
- bonuses
- review periods
- pay rises.
Get advice
If you are unsure about your rights or responsibilities or need advice, call us on 0800 20 90 20 or email us.