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HomeNEWSMinimum wage set to increase next week despite Covid-19

Minimum wage set to increase next week despite Covid-19

As the new financial year rolls around for April 1, 2020, minimum wage for adult employees will increase to $18.90. The current rate is $17.70, so a $1.20 increase per hour is worth talking about. 

Prime Minister Jacinda Ardern says that the wage increase will still go ahead despite the current economic situation due to Covid-19. “I think one of the benefits we have relative to other economies is that not only are we well-placed in terms of low debt, our position around surpluses, the upgrade package and that stimulus already going into the economy,” Ardern said.

Last week the Government announced a $12 billion Covid-19 Response Package that offers a subsidy for any size business that can show or forecast a loss of 30 percent or more due to the virus. This section of the package equalled $5.1 billion.

Retail NZ made efforts to lobby against the increase, happening in such tight times for a lot of businesses, with Covid-19 delivery some financial instability. Retail NZ Chief Executive, Greg Harford previously said, “A maximum subsidy of $150,000 for each business will be helpful for a number of small businesses who employ small numbers of staff, but will hardly make a dent in those larger businesses who are facing costs increases of near $1 million per annum due to the minimum wage increase scheduled for 1 April.”

The New Zealand Government has lifted the wage-subsidies cap on March 23, meaning larger business will have security too. Finance Minister, Grant Robertson says, “The expansion of the scheme outlined today takes the estimated cost of the wage subsidies scheme from $5.1 billion to $9.3 billion.”

Any worker whether full-time, part-time or casual, aged 16 or over that has been working at a company for six months or more, is entitled to the new rate. Employers are expected to have payroll updated in time for this change. For staff under 15 the no minimum rate still applies. 

If you have staff that are classes as ‘starting-out’ employees, the hourly rate will be increasing from $14.16 to $15.12. This also applies for staff aged 20 and over that on an industry training programme involving 60 plus credits a year. 


If you have employees on a salary contract, you need to ensure with that you increase their salary to meet the new minimum wage requirement, if it is not already. You also need to consider any overtime worked, meetings, or time spent preparing a business before and after the workday is included in these calculations. With all of this considered, if the total remuneration does not meet the new rate, you will need to increase their salary to meet the new legislation. 

If you need any further assistance with understanding how much you should be paying your employees see the table below from Retail NZ or contact them via email or phone

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Image: Retail NZ
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