Minimum wage – issues for farming businesses

All New Zealand employers should understand their obligations under the Minimum Wage Act. Farming businesses can face questions that may not arise for other employers.

From 1 April 2022 the minimum wage rates increase. The rates for adult workers are:

  • Hourly: $21.20 ($16.96 for Starting-out workers/Trainees)
  • Daily (based on an 8-hour day): $169.60 ($135.68 for Starting-out workers/Trainees)
  • Weekly (based on a 40-hour week): $848 ($678.40 for Starting-out workers/Trainees)
  • Fortnightly (based on an 80-hour fortnight): $1,696 ($1,356.80 for Starting-out workers/Trainees)

It is relatively straightforward to ensure your business is paying your workers at least minimum wage when your employees’ hours of work are regular and fit neatly within the ranges of an 8-hour day, a 40-hour week or an 80-hour fortnight.

It can be more complicated if your business is seasonal, typical for many farming businesses, with peak seasons requiring longer hours than usual, or irregular hours. It is important to have systems to ensure your business is fully compliant with minimum wage requirements. Even when you pay above minimum wage, you need to check.

In the old days some employers would average out wages over busy and quiet times. Under current law, the maximum period wages can be averaged over is a fortnight (and there are conditions on that).

If you provide accommodation or benefits such as food or firewood for your employees, you can agree with them to deduct the cost of accommodation from their wages. The Minimum Wage Act allows you to count some of these benefits as ‘wages’, but not all.

For more detail, download the guide.

Our Payroll Manager Jan is always happy to help if you have any questions, contact us today

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