The minimum wage increase announced by the government last December is set to kick in on April 1. Starting Monday, the adult minimum wage will rise from the current rate of $16.50 per hour to $17.70 per hour.

This means that businesses that have adult employees earning less than $17.70 an hour are legally required to increase their wage rates.

According to Retail NZ, businesses will need to advise the employee of this and record the change in writing, such as by drafting a ‘Variation Letter’ for the employee to sign.

The industry association advises employers should keep a copy for their records in case of an audit by the Labour Inspectors.

The minimum rates apply to all employees whether they work full-time, part-time or casually and whether they are paid a wage for time worked, a salary, partly or wholly on a commission basis, or for what they produce (piece rates).

The minimum adult rate applies to any employee aged 16 years and over unless they are eligible for the ‘starting-out’ wage or the ‘training’ wage.

There is no legal minimum rate for employees aged 15 years or younger.

Retail NZ advises that if a business has salaried employees, it will need to make sure the employees’total remuneration meets minimum wage requirements for each individual pay period, taking into account any overtime, meetings, or time spent opening and closing stores.

While the new minimum wage will likely put pressure on other business costs, the association said there are a number of ways to combat this, and to incentivise employees other than simple pay increases.