Minimum Wage Order 2012
Office of the Minister of Labour: Cabinet Legislation Committee
- This paper recommends that the Cabinet Legislation Committee authorise the submission of the Minimum Wage Order 2012 to the Executive Council. This Order increases the minimum wage rates for adults, new entrants and trainees. These changes were noted by Cabinet on 8 February 2012 (CAB Min (12) 3/6 refers).
- Minimum wage rates are set through an Order in Council made under Section 4 of the Minimum Wage Act 1983 (the Act). Under Section 5 of the Act, the Minister of Labour has a statutory obligation to review the minimum wage rates by 31 December each year.
- The Act provides that the Governor-General may, by Order in Council, prescribe the minimum rates of wages payable to:
- workers who are 16 years of age or older and to whom neither the new entrants’ nor the training minimum wage applies
- workers who are new entrants (16 and 17 year olds, except for those who have completed 200 hours or three months of employment, whichever is shorter; or who are supervising or training other workers; or to whom the training minimum wage applies), and
- one or more classes of workers defined in the Order and who are employed under contracts of service under which they are required to undergo training, instruction, or examination for the purpose of becoming qualified for the occupation to which their contract of service relates and to whom the training minimum wage applies.
- As a result of the review of minimum wage rates I have decided to recommend that the adult minimum wage rate be increased from $13 per hour to $13.50 per hour (i.e. by 3.8 percent), and that the new entrants’ and training minimum wage rates be increased so that they remain at 80 percent of the adult minimum wage rate.
Minimum Wage Order 2012
- The Minimum Wage Order 2012 gives effect to my recommendation to increase the minimum wage rates, as described below:
- For adult workers aged 16 years old and over, who are not trainees or new entrants, from $13 per hour to $13.50 per hour. For the purposes of the Order, this rate is also expressed as $108 per day, plus $13.50 for each hour worked in excess of 8 hours on a day; or $540 per week, plus $13.50 for each hour worked in excess of 40 hours in a week.
- For new entrants’, from $10.40 per hour to $10.80 per hour; or $86.40 per day, plus $10.80 for each hour worked in excess of 8 hours on a day; or $432.00 per week, plus $10.80 for each hour worked in excess of 40 hours in a week.
- For trainees aged 16 or over and undertaking at least 60 credits a year in an Industry Training Programme registered on the National Qualifications Framework, from $10.40 per hour to $10.80 per hour; or $86.40 per day, plus $10.80 for each hour worked in excess of 8 hours on a day; or $432.00 per week, plus $10.80 for each hour worked in excess of 40 hours in a week..
- These increases will come into effect on 1 April 2012 (CAB Min (12) 3/6 refers).
Timing and 28 day rule
- It is intended that the Minimum Wage Order 2012 will be notified in the New Zealand Gazette on 23 February 2012, and so will comply with the 28 day rule.
- These regulations comply with the following:
- the principles of the Treaty of Waitangi;
- the rights and freedoms contained in the New Zealand Bill of Rights Act 1990 or the Human Rights Act 1993. This proposal does raise an issue of discrimination under section 19(1) of the Bill of Rights Act 1990 on the ground of age. It is considered that this issue appears to be justified in terms of section 5 of that Act;
- the principles and guidelines set out in the Privacy Act 1993;
- relevant international standards and obligations. New Zealand has ratified International Labour Organisation Conventions Number 26: Minimum Wage-fixing Machinery 1928, and Number 99: Minimum Wage-fixing Machinery (Agriculture) 1951. The proposed Order in Council is consistent with these Conventions; and
- the “Legislation Advisory Committee Guidelines: Guidelines on Process and Content of Legislation”, a publication by the Legislation Advisory Committee.
Regulations Review Committee
- I do not consider that there are grounds for the Regulations Review Committee to draw the regulation to the attention of the House under Standing Order 315.
Certification by Parliamentary Counsel
- The draft Minimum Wage Order 2012 has been certified by Parliamentary Counsel as being in order for submission to Cabinet.
Regulatory impact analysis
- A Regulatory Impact Statement that complied with the requirements set out by the Cabinet Office was attached to the submission to Cabinet on the Minimum Wage Review 2011 on 2 February 2012.
- An announcement was made on 8 February 2012 outlining the changes that will be made to the minimum wage rates and noting that these changes will take effect from 1 April 2012. The Department of Labour will undertake further publicity to raise public awareness of this change to the minimum wage rates.
- In the course of the 2011 minimum wage review the following government agencies were consulted: The Treasury, Ministries of Economic Development, Health, Social Development, Youth Development, Education, Pacific Island Affairs and Women’s Affair, the Accident Compensation Corporation, Te Puni Kōkiri, Office for Disability Issues, Tertiary Education Commission, and Inland Revenue have been consulted in this review. Department of Prime Minister and Cabinet has been informed of the review.
- Submissions were received from the following 32 stakeholders: Crosspower, Restaurant Brands, Progressive Enterprises Limited, Working Women’s Resource Centre, SENZ Training & Employment Centre, In-Work NZ Limited, Unite, Foodstuffs (NZ) Ltd, Horticulture NZ, Federated Farmers of New Zealand, Mayors Taskforce for Jobs, Young Workers’ Resource Centre, IHC New Zealand, National Advisory Council on the Employment of Women, National Council of Women of New Zealand, New Zealand Nurses Organisation, Rural Women New Zealand, NZ Association of Registered Hairdressers Inc., Young people Union Movement, Café for Youth Health, Te Runanga o Kirikiriroa, NZ Retailers’ Association, People First NZ Inc., New Zealand Chambers of Commerce Inc., Hospitality New Zealand, Office of the Children’s Commissioner, National Association of Retail Grocers and Supermarkets of New Zealand (Incorporated), Business NZ, Service and Food Workers Union, F1RST Union, Small Business Advisory Group and New Zealand Council of Trade Unions.
I recommend that the Cabinet Legislation Committee:
- note that on 8 February 2012 Cabinet noted my intention to recommend that the adult minimum wage rate be increased from $13 an hour to $13.50 an hour, and that the new entrants’ and trainees minimum wage rates be increased so that they are maintained at 80 percent of the adult minimum wage rate (CAB MIN (12) 3/6 refers );
- note that the Minimum Wage Order 2012 gives effect to my recommendation referred to in paragraph 1 above;
- note that the Minimum Wage Order 2012 comes into force on 1 April 2012;
- authorise the submission to the Executive Council of the Minimum Wage Order 2012.
Hon Kate Wilkinson
Minister of Labour
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