Minimum wage change cheers farmers
The Minimum Wage Order will change to include a fortnightly minimum wage rate, Labour Minister Simon Bridges ruled today.
The new order, which will take effect from June 26, is good news for farmers.
A recent court ruling had found that a week was the longest period for which salaried workers could be assessed for compliance with the Minimum Wage Act.
However, Bridges said the ruling had not adequately reflected current work practices, such as salaried employees on fortnightly rosters.
"Before the court ruling, salaried employees might work 30 hours in one week and 50 hours the next, and be paid 80 hours for the fortnight," Bridges said.
"Following this ruling, employers would need to pay 90 hours at the minimum wage rate for the 80 hours worked. This is because the first week must be paid at a minimum of 40 hours and the second week for every hour over 40."
A central concern was that the ruling could have seen an increase in casual working arrangements, both for current workers and new workers, to avoid the extra costs. This would have created issues for workers around certainty of their income, Bridges said.
Agri HR consultant Melissa Vining said the news could be seen as bad by farm workers, but would be good news for farmers, some of whom had been fined for not adhering to previous rules that prohibited averaging.
Her work around Southland showed many dairy farmers were unaware of the rules when paying workers. In most cases, the issue came down to a lack of understanding about seasonal averaging and a failure to keep accurate time and wage records, Vining said.
Farmers were told in April to "lift their game" after Ministry of Business, Innovation and Employment's labour inspectorate visited 44 farms throughout the country, 31 of which were found to have breached minimum employment rights.
Southland inspectors found three out of seven Southland dairy farms had flouted basic employment laws.
"Farm owners can celebrate because it will be a more practical way to manage minimum entitlement requirements," Vining said.
However workers could be disappointed.
"For example, an employer can now make a staff member work 70 hours in one week and 30 hours the next," she said.
Southland Federated Farmers president Russell MacPherson said farmers would welcome the announcement because it would make things easier for them.
"The Government has seen sense and now farmers will no longer be breaking the law."
Farm workers would not miss out on payment, it would just mean different roster structures, he said.
Bridges said that by including a fortnightly minimum wage rate, employees would still be paid for every hour they worked, and the expectation was that employers would continue to keep an accurate record of hours worked and wages paid.
Employees would continue to benefit from the certainty and stability that a salary offered.
"While some groups advocated for a monthly or longer pay period to be included, a fortnightly pay period balances the need for employers to have some flexibility in the hours their salaried employees work with the need for employees to be protected from being required to work long hours for long periods without appropriate remuneration," Bridges said.
"It also aligns with the most common pay period for employees who receive an annual salary."
Most employers and employees will be unaffected by the new order. It primarily minimum affects wage earners who are paid salaries.
Employer groups and unions were consulted prior to the decision.
- The Southland Times