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employment

Starting-out wage and Training wage explained

Key Takeaway

New Zealand law includes specific minimum pay rates called the starting-out wage and training wage. The starting-out wage applies to eligible young employees new to the workforce, while the training wage applies to employees undertaking approved industry training. Both are set as a percentage of the adult minimum wage and have specific eligibility and duration criteria.

New Zealand law establishes different minimum hourly pay rates for certain employees, including the starting-out wage and the training wage [Source: Minimum Wage Act 1983, s 4]. These rates are typically lower than the adult minimum wage and apply under specific circumstances related to an employee's age, work experience, or participation in recognised training programmes.

Understanding the Starting-Out Wage

The starting-out wage is a specific minimum hourly pay rate that applies to certain employees who are beginning their careers [Source: Minimum Wage Act 1983, s 4A(1)]. It is an exception to the standard adult minimum wage.

Eligibility Criteria

An employee can be paid the starting-out wage if they meet one of the following conditions [Source: Minimum Wage Act 1983, s 4A(1)]:

  • They are aged 16 to 19 years old and have not yet completed 6 months of employment with any one employer since turning 16 years of age.
  • They are aged 18 or 19 years old, have been on a specified benefit for 6 months or more, and have not yet completed 6 months of employment with any one employer since turning 16 years of age.

Duration of Application

An employee can be paid the starting-out wage for a maximum of 6 months. This period may end earlier if the employee turns 20 years old, or if they complete 6 months of continuous employment with any one employer, whichever comes first [Source: Minimum Wage Act 1983, s 4A(2)]. Once the eligibility period ends, the employee must be paid at least the adult minimum wage [Source: Minimum Wage Act 1983, s 4A(3)].

Rate of Pay

The starting-out wage is set as a percentage of the adult minimum wage [Source: Minimum Wage Act 1983, s 4(1)(a), s 4A(1)]. The specific percentage and actual monetary rate are determined by an annual Minimum Wage Order [Source: Minimum Wage Act 1983, s 4(2)].

Understanding the Training Wage

The training wage is a specific minimum hourly pay rate that can be paid to employees who are undertaking recognised industry training [Source: Minimum Wage Act 1983, s 4B(1)]. Industry training involves structured learning and assessment programmes, often leading to a recognised qualification, undertaken as part of employment.

Eligibility Criteria

An employee is eligible for the training wage if they meet both of the following conditions [Source: Minimum Wage Act 1983, s 4B(1)]:

  • They are aged 16 years or over.
  • They are undertaking an industry training programme that involves structured learning and assessment, which is recognised by a relevant industry training organisation or other training body.

Duration of Application

The training wage applies only for the period during which the employee is actively undertaking the approved industry training [Source: Minimum Wage Act 1983, s 4B(1)]. Once the training is completed or ceased, the employee must be paid at least the adult minimum wage [Source: Minimum Wage Act 1983, s 4B(2)].

Rate of Pay

The training wage is also set as a percentage of the adult minimum wage [Source: Minimum Wage Act 1983, s 4(1)(a), s 4B(1)]. The specific percentage and actual monetary rate are determined by an annual Minimum Wage Order [Source: Minimum Wage Act 1983, s 4(2)].

General Minimum Wage Requirements

All employees in New Zealand are covered by the Minimum Wage Act 1983 unless specifically exempted [Source: Minimum Wage Act 1983, s 2(1)]. An employer has a legal obligation to pay an employee at a rate not less than the applicable minimum wage, whether it be the adult, starting-out, or training wage [Source: Minimum Wage Act 1983, s 6].

Furthermore, an employee's employment agreement – a legally binding contract between an employer and an employee outlining the terms and conditions of employment – must clearly state the wage rate and how it is calculated [Source: Employment Relations Act 2000, s 65(2)(a)].

When to Seek Independent Legal Advice

It is recommended that individuals seek independent legal advice if they have specific questions about their eligibility for the starting-out or training wage, believe they are not being paid correctly, or require clarification on their rights and obligations under New Zealand employment law. Assistance can be sought from relevant government agencies such as Employment New Zealand, or from organisations like Community Law Centres.

Key Resources