The Ministry of Business, Innovation, and Employment (who oversee the minimum wage) and HITO understand that businesses put a lot of time and money into training apprentices. The training wage is an effort to allow businesses to invest money otherwise paid to an employee into their training while they work towards becoming a fully qualified senior.
New Zealand has three minimum wage rates:
- The starting-out wage.
- The training wage.
- The adult minimum wage.
Employers must pay at least the starting-out wage to 16-19-year-olds who undertake at least 40 credits per year of industry training.
Employers must pay at least the training wage to anyone 20 or older who undertakes 60 credits per year of training. If you intend to pay your trainee these wages, reassess this at the beginning of each year to make sure they’re still eligible.
A hairdressing apprentice in their fourth year of apprenticeship only completes 50 credits. If the apprentice is under 20 years of age, they’re still eligible for the starting-out wage, as they are completing at least 40 credits in that year. However, if they are over the age of 20, you must pay the adult minimum wage as a minimum, as they will not complete 60 credits in that year.
Both the starting-out wage and the training wage are always 80% of the adult minimum wage.
As of 1 April 2020:
The adult minimum wage is $18.90 per hour.
The training or starting-out wage is $15.12 per hour.
The minimum wages are the minimum that employers must pay. Employers should consider paying more to represent the learner’s growth in skills and productivity as they develop during their training and to encourage staff retention.
N.B: Employers must pay employees at least the adult minimum wage once their training agreement has ended.
You can find more information on wages and other employment conditions from the Employment New Zealand website.