Southland farmers have welcomed a law change allowing for a minimum fortnightly wage rate but it might not be so popular with farm workers.
The move, to take effect on June 26, relates to how wages are averaged over a fortnight, Labour Minister Simon Bridges said.
"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. However, 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."
The announcement follows a court ruling that a week is the longest period the hours of salaried workers can be assessed to comply with the Minimum Wage Act.
The ruling did not adequately reflect current work practices, such as salaried employees on fortnightly rosters, 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, who had been getting fined for not adhering to previous rules that prohibited averaging.
"Farm owners can celebrate because it will be a more practical way to manage minimum entitlement requirements. However, workers could be disappointed," Vining said.
"For example, an employer can now make a staff member work 70 hours in one week and 30 hours the next," she said.
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.
By including a fortnightly minimum wage rate, employees will still be paid for every hour they work, and the expectation is that employers must continue to keep an accurate record of hours worked and wages paid.
Bridges said a central concern was that the ruling could see an increase of casual working arrangements, for both current workers and new workers, to avoid the extra costs. This would create issues for workers around certainty of their income.
Southland Federated Farmers president Russell MacPherson said farm owners 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 be missing out on wages; it would just mean different roster structures, he said.
In April, farmers were told to "lift their game" after the Ministry of Business, Innovation and Employment's labour inspectorate visited 44 farms throughout the country, 31 of which were found to be in breach of minimum employment rights.
Southland inspectors found three out of seven Southland dairy farms had flouted basic employment laws.
Most employers and employees will be unaffected by the new law.
- The Southland Times