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There are many situations where your business might benefit from taking a chance on a younger employee starting in their career. New Zealand allows businesses to pay a starting-out minimum wage of $15.12 per hour to younger staff who fit the criteria to encourage businesses to employ these workers. In addition to a cheaper wage, your business can benefit from training and developing a younger employee. You may even get a long-term contributor to your business as they get up to speed. This article will set out:

  • the starting-out wage; 
  • when your business should consider offering this role; and
  • some tips on managing employees on a starting-out minimum wage. 

What Is the Starting-Out Minimum Wage?

The starting-out minimum wage is $15.12. This wage aims to incentivise employers to hire younger employees who are getting started with their careers and skillsets. These workers may involve additional training compared to other employees. This is partially why the starting-out wage is less than the standard adult minimum wage. 

There are strict limitations on which employees your business can pay the starting-out minimum wage. It is common for an employee to begin work fitting these criteria, but no longer does so as they age or gain experience. In this case, you must pay them at least the adult minimum wage ($18.90).  You can pay the starting-out minimum wage to:

Age RangeRule
16- and 17-year-old employeesThese employees who have not completed six months of continuous employment service with one business. After six months with one employer, they are no longer starting-out workers. Therefore, you must pay them the adult minimum wage.
18 and 19-year-old employeesThese employees who have been paid one or more social security benefits for six months or more, and have not completed six months’ continuous employment with an employer since they started receiving a benefit.
16 to 19-year-old employeesThese employees whose employment agreements require them to do at least 40 credits a year of industry training. These employees are likely to be apprentices.

Note that if an employee supervises or trains other workers, then the starting-out minimum wage does not apply. You must pay these employees at least the adult minimum wage.

When Should I Offer a Role With a Starting-Out Minimum Wage?

Your business should consider offering a role with a starting-out wage when there are situations that suit a younger employee. You may find that this employee does not need much experience to do a good job. Alternatively, you may be looking to fill a role that a person with little experience can quickly learn. There may also be situations where having a younger employee is especially useful. For example, a particular role may involve contact with young people. 

Other common situations where your businesses can consider hiring an employee starting out their career are when your business employs tradespeople and are certified to provide industry training. Your business may want to provide industry training and employ apprentices. In that case, you can seek further information from the Tertiary Education Commission and discuss with them whether your business can support apprentices. 

Tips for Managing Young Employees

Employees on a starting-out minimum wage are likely to be relatively new to their roles and quickly develop new skills and experiences. This context is important when managing them day-to-day. While there should be processes for feedback and improvement for all employees, this is particularly important for your employees starting their careers. Further, you should provide them with support and mentoring to give them a platform to develop their ability to do their role and gain confidence. 

You should never be demeaning or condescending to younger employees. Likewise, you owe a good faith duty to all employees, regardless of age or experience. Even though they may lack experience compared to the rest of your staff, they can make valuable contributions of their own and may be able to bring a fresh perspective to issues or standard practices. How you treat these employees will help shape them at a vital point in their career, and they will never forget their first manager!

Key Takeaways

Your business should offer a role with a starting-out wage if there is an opportunity or vacancy for a young person to begin their professional career and build their skills. Workers on this wage may need more training or development than other employees at first. Fortunately, this is usually offset by the lower wage relative to the default adult minimum wage. Also, these employees can often become some of the most loyal and useful employees in your business, repaying the faith shown in them when they were starting out. If you want to know more about the starting-out wage or to discuss your workforce needs, contact LegalVision’s employment lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions

What is the starting-out minimum wage?

The starting-out minimum wage is $15.12 and aims to incentivise New Zealand businesses to hire younger employees starting in their careers.

Who can be paid the starting-out minimum wage?

You can pay the starting-out minimum wage to 16 and 17-year-old employees who have not completed six months of continuous employment service with one business. Also, 18 and 19-year-old employees who have been paid one or more social security benefits for six months or more are eligible. Finally, 16-to-19-year-old employees whose employment agreements require them to do at least 40 credits a year of industry training can earn this wage.

Can an employee on the starting-out minimum wage be supervising other employees on the starting-out wage?

No. If an employee supervises or trains other workers, they must be paid at least the adult minimum wage.

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