Minister Closes Loophole On Youth Training Rate
Youth Affairs and Associate Labour Minister Laila Harré says a bill introduced to Parliament today will repeal a provision of the Minimum Wage Act that allows employers to pay young workers literally nothing while they train on the job.
This loophole in the Act exempts employers from paying minimum wage rates if an employment agreement includes a certain level of relevant training towards a qualification registered on the National Qualifications Framework.
Laila Harré says last year's youth minimum wage review revealed that the use of this exemption was particularly common in hands-on industries such as hairdressing and horticulture.
The new law will set a minimum level equivalent to the youth minimum wage, which is currently $5.40 an hour or 70% of the adult minimum and due to increase to 80% of the adult minimum in March 2002.
Laila Harré says the introduction of the Minimum Wage Amendment Bill is the latest in a series of progressive moves by the coalition to improve the wages of the lowest paid.
"The Alliance saw improving the lot of young workers as a top priority for the government, and today we will be able to mark of another significant achievement. This was an Alliance policy taken up by the whole government and we're proud of that."
Just after the election the 1999 election the coalition also raised the adult minimum hourly wage from $7 to $7.55, or 7.8 per cent. At the same time the youth rate, payable to 16 to 19 year, olds was increased by 35 cents to $4.55.
"A year later the Labour-Alliance Coalition announced an increase in the adult minimum wage to $7.70 an hour, lowered the threshold for the adult minimum wage to 18, and boosted the rate of payment for 16 and 17 year olds to 80% of the adult minimum over two years.
"We also made a commitment to do away with the training exemption and replace it with the training minimum wage, and today we are delivering on that promise."
Because there is no system for the registration of exemptions it is impossible to say exactly how many young workers in training will se an increase in their wages.
"However we do know that as at June 30 last year approximately 26,000 worker trainees were taking 60 or more credits an therefore potentially not covered by the youth minimum wage," Laila Harré said.