Salary Payments and Minimum Wage – A Word of Caution
Are you meeting your obligations to pay salaried staff at least the minimum wage?
This is a hot topic in the media lately with cases such as Burger King last week. Our team is also noticing an increase in issues relating to payments made to salaried employees, where employers are not always meeting the threshold of paying the minimum wage.
If you have salaried employees, you must ensure that you are meeting the minimum wage threshold for every hour worked. This can be an area of risk for salaried employees, as they receive fixed payment each pay period, and are not paid by the hour as waged employees are. The minimum wage applies to all hours worked and employees must be paid at least the minimum hourly wage (currently $16.50 p/hr) for every hour worked, in their pay period.
As an employer, you can check this by dividing the salaried employees pay by the number of hours worked in that pay period to ensure the employee is receiving the minimum rate of $16.50 per hour. As the minimum wage increases over the next 2 years, it will be imperative to check regularly that salaried employees are being paid at least the current minimum wage, particularly if your salaried employee is paid close to the current minimum wage and/or they work extra hours. Hours and pay cannot be offset by the employee working less hours at another time. An example would be if you have seasonal operations, the peak season is not offset by the low season.
We recommend that you keep accurate time and pay records for your salaried employees as well as for your waged employees. These can be kept electronically using business systems where available or manually.
If you have any questions regarding pay, or would like to discuss options for maintaining time and pay records for your staff, please call the team at Grow HR on 06 878 5454 or email team@growhr.co.nz