Employers
Paying employees
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 and giving pay rises
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
- 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 over
- 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.
Setting pay and pay rises
CareersNZ has information about the pay range for many jobs.
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.
Pay rises
You do not have a legal obligation to provide a pay rise or conduct a performance review unless it is in an employment agreement or workplace policy. However, it is best practice to regularly review employees' performance and pay. You and your employee should negotiate:
- rates of pay
- salaries
- bonuses
- review periods
- pay rises.
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 Good faith means dealing with each other honestly, openly, and without misleading each other. It requires parties to raise issues in a fair and timely manner, treat the other party with respect, and give the other party information which may be referred to in any future discussions.
Get advice
If you are unsure about your rights or responsibilities or need advice, call us on 0800 20 90 20 or email us.