Hello and welcome to DKW Recruitment Group’s brand new blog, which will focus on helpful articles with regards to New Zealand employment, work opportunities, business news, legislations changes, case studies on successful candidates, tips on business success, and so much more. For our first post, we can start with the latest news from New Zealand Parliament. Being the 1st April 2021, it is the beginning of the new financial year, and with that comes the long awaited minimum wage increase.
From $18.90, the minimum wage has officially gone up to $20.00 NZD today. This includes a rise of the starting/training wage to $16.00 or 80% of the adult minimum wage. This was apart of an election promise made by Jacinda Ardern during the election campaign at the tail-end of 2020. The rise of the minimum wage is said to help at least 175,000 working adults in New Zealand with what is called a living wage.
Though the rise of the minimum wage will most likely bring relief to many households and working families, the new legislation has been met with criticism as business owners have argued that the $1.10 increase will be demanding on businesses who are facing economic uncertainty due to the effects of the pandemic (including close borders, economic downturn, etc). Similarly, the Ministry of Business, Innovation and Employment suggested delaying the raise until October 2021 and reducing it by 0.25c for similar reasons. However, Jacinda Ardern and the Labour Party view the increase as a compromise to meet rising costs of living and what employers can afford for their workers, stating “Our job as government is to constantly strike that balance of ensuring that our lowest paid workers are earning enough to meet their cost of living and to thrive. At the same time balancing that against the ability of employers to sustainably keep people on.”
The rise of minimum wage was not the only legislation changes that took effect today. Keeping good on their election promises, the top tax rate has now increased to 39% on those individuals that earn more than $180,000 a year. There is also followed by a new fringe benefit tax rate of 63.93% which will affect that 39% tax bracket to avoid top earners being paid in perks. Finally, there are some additional changes to the benefit, with those receiving it able to earn more through work before their benefit payments are reduced or cut. All this and possibly more to come in 2021!
Be sure to check the government websites to see if any of these new legislation changes effect you: https://www.legislation.govt.nz/