Preparing for the new minimum wage - E-guide employsure.co.nz
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E-guide Preparing for the new minimum wage employsure.co.nz
Introduction
Wages, a big cost. Employees,
a bigger asset.
New Zealand already has one of the highest
minimum wages in the world; and from April
Contents
2020, more than 200,000 Kiwi workers will
Page 2
benefit from an extra $48 a week.
The cost of doing business becomes Minimum Wage Increase
more challenging as wage increases are
introduced. Small business owners will Page 5
be pressured into reconsidering their Retaining and motivating
staffing needs.
staff under financial pressure
Employsure understands the importance
of employees and how a great team, or lack Page 9
of one, can make or break your business.
Inexpensive investments
So we’ve carefully put together this
e-guide to help you save on costs without to grow your business
compromising on your biggest asset:
your employees.
CHAPTER 1 - Minimum wage increase PAGE 1
Minimum wage increase. CHAPTER 1 PAGE 2
Minimum wage increase.
Effective 1 April 2020, the minimum
wage is mandatory to be paid to an
employee irrespective of the hours
worked or job responsibilities.
Adult Minimum Wage - $18.90 Per Hour
This wage is the most commonly
used by Kiwi businesses and applies to
all the employees who are 16 years of age
or older, provided they do not qualify for the
starting out or training wages. Why have a minimum wage?
New Zealand was the first country in the
Starting-Out Wage - $15.12 Per Hour
world to establish a Minimum Wage Policy in
1894, although the idea of a minimum wage
Workers aged 16-19 who are entering the
has been around a lot longer. Minimum wage
workforce for the first time.
laws have been modified over time to provide
• this only applies to 16 and 17 year equal pay and fairness in the workplace, while
olds during the first 6 months of their aiming to increase the standard of living and
employment. Or 18 or 19 year olds who have reduce poverty.
been on a benefit for 6 months or more prior
The argument for and against the minimum
to their employment – and only for their
wage, and what rate it should be set at is still
first 6 months of continuous employment
heavily debated to this day.
following them being on a benefit
• it also applies to 16 – 19 year olds if they
are doing at least 40 credits in a training
programme just like the training
minimum wage
Training Minimum Wage - $15.12 Per Hour
If employers pay at the current
This category of wage applies to employees
minimum wage rates, they should
aged 20 years or over who are completing
start forecasting the increase to
recognised/accepted industry training
their wages bill, and increase in
involving at least 60 credits in order to
pay only from 1 April 2020.
become qualified.
CHAPTER 1 - Minimum wage increase PAGE 3
Minimum wage increase.
How often does the minimum and salary, and most employees who earn a
commission or piece rates.
wage change?
There are employees who are exempt from
h year the Minister for Workplace Relations the standards of the Minimum Wage Act
and Safety fulfils their obligation under 1983. They include:
the Minimum Wage Act 1983 to submit an
• e
mployees under 16 years (but they
annual review of the minimum wage by 31 are still entitled to other minimum
December. Since 2000, the New Zealand employment rights)
minimum wage has increased on a yearly • s ome disabled employees who hold an
basis for each type of minimum pay including exemption permit from the minimum wage
adults, new entrants and trainees.
• inmates of a charitable institution
Who does the minimum wage • p
risoners working in custody under the
apply to? Corrections
• a pprentices who are under: the Maori
Minimum wage rates apply to all employees
Housing Amendment Act 1938, the New
aged 16 years and older who are full-time, Zealand Railways Corporation Act 1981,
part-time, fixed-term, casual, and work from the Defence Act 1971, the Post Office
home. The minimum wage standard applies Act 1959, the State Services Act 1962,
to employees who are paid an hourly wage or under any other Act.
CHAPTER 1 - Minimum wage increase PAGE 4
Retaining and motivating staff under financial pressure. CHAPTER 2 PAGE 5
Retaining and motivating
staff under financial pressure
Retaining your best staff
under financial pressure.
The recent minimum wage increase to
$18.90 an hour is effective from April 1 2020.
Small business owners who employ staff on
minimum wage will have to increase wages
accordingly. This may prove to be a bit of a
dilemma for employers as they may have
less financial resources to reward their
best staff.
This places additional strain on the
budgets of many employers, making it near
impossible to promote their best staff. With
promotions out of the equation, how can
employers retain their best staff?
Pocket-friendly methods.
Providing flexible working
Employee reward and recognition is a
arrangements is almost twice as
powerful tool in retaining employees. It
popular in retaining staff than a
moves employees from being pay check
salary increase.
motivated, to finding purpose and drive
in becoming active contributors to the
growth of your business.
In a recent survey, Employsure clients were Almost 40% of employers surveyed
invited to share their views on the best suggested that providing flexible working
methods to retain employees. Below are arrangements was the best approach
the most common and successful methods to retain staff. In fact, flexible working
arrangements was surveyed to be nearly
of retaining employees according to
twice as successful in retaining staff when
Employsure clients:
compared to offering pay increases
• F
lexible working arrangements 38% and bonuses.
• P
ay increases and bonuses 20% Employers can also choose to combine the
• T
raining 16% methods above to create a wholesome work
• S
ocial events 2% environment, which will lead to an increase in
staff retention. They could perhaps provide
• P
romotions 2% flexible working arrangements, as well as
• I mproving health and safety 1% occasional training and organise social events.
CHAPTER 2 - Retaining and motivating staff under financial pressure PAGE 6Retaining and motivating
staff under financial pressure
Other methods to explore.
According to recruiting experts Hays,
voluntary staff turnover has risen in 23% of
organisations in New Zealand within a year.
The evidence suggests that it is getting
increasingly challenging for employers to
retain staff.
If you’re looking to retain and engage staff
beyond the typical retention rates, these
5 handy tips can help.
1. E
nsure work is challenging: Set goals
for employees — when people know that
they have a purpose at work and goals to
achieve, they not only tend to stay longer,
they also try their hardest at work.
2. I nvest in professional development:
Keep your staff engaged and motivate
them to achieve personal development
goals. Guide them and learn about their
journey and make sure that they know that
there is a path and direction for them.
3. P
romote internally: Internal promotions
will maintain a high performer’s desire
and need to succeed continually, which
ultimately benefits the business.
4. P
rogress and performance reviews:
Regular catch ups are a helpful tool in
letting your employees know that they
are cared for and appreciated. It also
provides a chance for employers to provide
feedback and learn about the challenges
that your employees are facing.
5. R
ewarding a job well done: A basic
human need. Everyone likes to feel
appreciated and have their hard work
acknowledged. So a simple thank you,
for a job well done, can go a long way.
CHAPTER 2 - Retaining and motivating staff under financial pressure PAGE 7Retaining and motivating
staff under financial pressure
Engaging the disengaged. • What can I do to assist you in your role?
Employee engagement is key to a successful Once you know what you need to improve
business. But how do you achieve employee and have gained insights into the desires of
engagement? The first step would be to your employees, you can begin implementing
assess your current work environment changes to help engage your staff members.
and culture to identify any areas for
improvement.
A great way to start improving employee What exactly motivates staff?
engagement is to speak with your employees Dan Ariel’s study tested which
themselves. Have an honest conversation to incentive would boost productivity
understand their needs. the most:
Some fundamental questions to • Voucher for a free pizza
consider asking: • Cash bonus
• A
re you challenged by your current role • Compliments from their boss
and the work performed?
The results?
• W
hat are your career plans?
In the course of two weeks, the
• A
re you aware of how your work
group receiving compliments from
contributes to the business?
their boss saw over 6.6% increase
• W
hat do you most enjoy about working for in productivity – while the group
the company? promised the cash bonus became
• I f you could identify one major area you 6.5% less productive.
would like to improve, what would it be?
CHAPTER 2 - Retaining and motivating staff under financial pressure PAGE 8Inexpensive investments to grow your business. CHAPTER 3 PAGE 9
Inexpensive investments
to grow your business.
Penny wise, pound foolish. • A
re there achievable goals that you have
set for your employees?
At times, it is necessary to spend money to
make money. As a business owner, expenses • D
o you invest in employees’ professional
are unavoidable — the assumed costs are development?
regular bills, salary, and logistical expenses. • A
re you aware of your employees’
However, the investments that tend to be aspirations?
avoided may actually be the ones that can • Do you promote internally?
grow your business, and those are exactly • D
o you conduct regular performance
the investments that this chapter will be reviews?
looking into.
• Do you reward a job well done?
Staff happiness. Training and development.
This element cannot be reiterated enough.
There have been many instances where
It is absolutely essential that employers
employers are disinterested or reluctant
value their staff and realise that the business
to upskill their employees. This is usually
cannot grow with an unhappy team. There brought on by their apprehension of the
are many ways to ensure staff happiness. employee leaving the company. If the
For starters, ensure that your staff is employee does leave, it would result in an
comfortable in their place of work. This extra and unnecessary cost for the employer.
includes both tangible and intangible However, having a team of employees who
comfort. From peace of mind (knowing are not developing and growing with the
that they have the right support) to industry is a much greater risk. This will not
physical comfort (like a conducive, safe and only hold the business back and make it less
comfortable work environment). competitive in its field, but employees who
Even little gestures can go a long way are not constantly developing and improving
towards boosting staff morale, such as have a far greater likelihood of becoming
providing occasional food and drinks. Most jaded and disengaged.
importantly, employers should keep in mind
that a happy team will be motivated to play
their part in pushing a business forward. 74%
Below is a more thorough checklist that of high potential employees will
employers can use to drive staff engagement. consider joining another organisation
• D
o your staff feel challenged? for better career development.
• D
o your employees feel like they have a IBM Best Workplaces Survey 2017
purpose?
CHAPTER 3 - Inexpensive investments to grow your business PAGE 10Resource library.
There are many ways of building a low-cost resource library.
Below are two easy and effective ways to go about this:
Circulate amongst employees Reach out to local colleges
Speak to your employees and ask Educational institutions tend to have
them what is and has been on their collections of textbooks and other
reading list. Chances are that quite a resources that they are either willing
few of them may have self-help and to give away at a reduced cost, and at
training books that they are reading. times at no cost at all. You may even
Encourage them to bring these enter a community arrangement to
books in and share it amongst their borrow these books from them.
colleagues. Before you know it, you
will have a pool of employee-sourced
books and materials.
CHAPTER 3 - Inexpensive investments to grow your business PAGE 11Inexpensive investments
to grow your business.
Use free and industry seminars owners and employees to attend.
Signing up all of your employees for Have a look at the free seminars provided
external seminars may be heavy on the by Employsure.
wallet. Missing out on important seminars, Online Training
however, could also be detrimental for your
business. A simple solution would be to pick An obvious benefit of online training is its
cost-effectiveness. It significantly reduces
a representative to attend the seminar on
expenses such as meals, accommodation,
behalf of your business. After the seminar,
and travel. Also, online courses in general
schedule a formal meeting where the
tend to have a lower fee per person than in-
representative can share the information
person training. Yet another benefit of online
acquired amongst the team.
courses is that they save on time. Getting
Alternatively, there are several organisations your employees to do an online course rather
that provide free and industry-specific than an actual one shortens the amount of
seminars. This is an excellent and cost- time spent outside the office, minimising
efficient avenue to explore for both business time wastage.
CHAPTER 3 - Inexpensive investments to grow your business PAGE 12Employsure is the largest pro-
vider of employment relations
and workplace health and safety From contracts right through to
safety… you suddenly have that
services in New Zealand. safety net, all the information
you need in one place to make
Why Employsure? sure that you’ve got it right.
At Employsure, we believe all New Zealand Lesley Jacobs | Country Charm Furniture
employers, no matter the size, deserve access
to comprehensive, quality, honest advice
and support that is scalable to the needs of
their business. Unlike big corporations, small
businesses don’t always have in-house HR and
legal departments to interpret the complex
language of the Employment Relations
Act. Changes to legislation and workplace
compliance are becoming increasingly
complex and difficult to manage, especially
for overstretched small business owners.
If I could do one thing different,
Employsure was established in response
I definitely would have employed
to these challenges. It is our aim to ensure
the services of Employsure a lot
New Zealand business owners have access earlier. They’ve taken a lot off
to cost-effective, professional advice on all my plate.
employment relations and work health and
safety issues. Renata Watene | Occhiali Optometrist
What we offer
Employsure provides customised
documentation, unlimited advice, policy and
procedure review, legal representation for
small business owners.
Being an Employsure client means no surprises
– we keep our clients updated about legislation
changes, wage updates and essential
compliance issues. Our expert advisers are
available 24 hours a day to guide employers Our employees are important
to us. They’re the face of the
through any difficulties they may face.
business. They represent
everything that we stand for.
0800 675 700
employsure.co.nz Gordon McKerchar | Final Touch LtdYou can also read
