Unwise, unfair and unnecessary: Minimum Wage Order amendment lets down low paid workers

The New Zealand Council of Trade Unions is disappointed with the decision today by Minister of Labour Simon Bridges to amend the Minimum Wage Order to allow wages to be calculated over a fortnight. 

Jeff Sissons, CTU General Counsel says:  “This is an example of poor policy making on the hoof.  The Government is succumbing to pressure from dairy farmers to change a system that has worked well since the 1890s.  It will benefit some of the worst employers in the country and could result in pay reductions for thousands of workers near the minimum wage.”

A move to fortnightly calculation allows an employer to offset payments for work in one week against payments due to the worker in the following week.   For example, the weekly minimum wage is currently $570 per week (and the new fortnightly rate will be $1,140 therefore).  A worker who earns $670 in one week (for example through overtime, shift rates other payments) then only $470 dollars in the next week.  Under current law, the worker would be able to claim for payment up to $570 in the second week whereas under the new law the employer would be able to count the additional payments in the first week.

These changes make it more attractive for employers to make their workers undertake long hours.  Along with proposed changes to remove guaranteed rest and meal breaks, they will lead to greater fatigue and more accidents.

Sissons says: “We understand that the amendment comes as a direct result of lobbying by dairy farmers.  The dairy farmers are pushing for a loosening of employment laws following Ministry of Business Employment and Innovation inspections finding that almost three quarters of the dairy farms inspected (31 of 44 farms) breached their workers’ basic employment rights.   This change sends a message to employers that they should lobby their way out of basic obligations rather than observe them. The Government should be encouraging farmers to improve their workers’ pay and conditions, not worsen them.”

“The Minister of Finance has said that workers should expect to see higher wages as the economy picks up.  However, this change along with others such as the reintroduction of youth sub-minimum wages and proposed weakening of collective bargaining rights actively hinder workers’ attempts to get a fair week’s pay for a fair week’s work.”
 

See a copy of the CTU’s submission on the proposal to amend the Minimum Wage Order 2014 here.

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