Fortnightly Minimum Wage changes 2014

Good news: On 26 June 2014, the Minimum Wage Order changed to include a fortnightly minimum wage rate.

Most employers and employees will be unaffected by the new Order. It affects primarily minimum wage earners who are paid salaries. Employer groups and unions were consulted prior to the decision.

Most affected will be those involved in dairying and other farming sectors, plus truck drivers and others who work longer days in their respective seasonal work.

The change was in response to a recent Court ruling that found a week is the longest period that salaried workers could be assessed for compliance with the Minimum Wage Act.

In the past, employers have traditionally averaged salaried workers pay over a whole year. In the busy times employees worked very long hours and then had a shorter hours at other times.

Lately, the Department of Labour has been policing this based on a weekly cycle, i.e. the employee had to be paid $14.25 (minimum hourly wage rate) for every hour worked.

Example:

Annual salary $45,000. This equates to $865 per week. If the employee works more than 60 hours in a week they will not be receiving the minimum wage. It is common in some industries such as dairy farming to work more than this at busy times such as calving.

The new ruling allows this to be worked out over a fortnight. The employee would be able to work up to 120 hours in that period and still be compliant.

This change will be very helpful for employers to ensure employees are paid appropriately for every hour they work while employees will continue to benefit from the certainty and stability that a salary offers.

Employers must continue to keep accurate record of hours worked and wages paid.

Should you have any concerns as to how this affects your business, please contact your Moore Stephens Markhams advisor.

Winter 2014.

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