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CTU Opposes changes to minimum wage calculation

30 April 2014

CTU Opposes changes to minimum wage calculation

The Government has announced a proposal to allow employers to average their workers' wages over two weeks rather than one. They have sent out a letter to businesses and unions asking for feedback on a plan to amend the law. The New Zealand Council of Trade Unions (the CTU) opposes this change. It incentivises unsafe and unhealthy hours of work and may be used to pay very low paid workers less money.

Salaried workers are entitled to the minimum weekly wage of $570 per week for a 40 hour week plus the minimum hourly wage of $14.25 for each hour thereafter. Employers want to be able to average this fortnightly so that workers would be paid $1,140 per fortnight plus the minimum hourly rate for each hour above 80. This change allows employers to avoid paying extra for making their workers work above 40 hours per week.

CTU General Counsel Jeff Sissons says "This proposal is a result of intensive lobbying by farmers. It is common for farmers to put low paid workers (at or near the minimum wage) on salaries and make them work extremely long hours (between 50 and 60 hours per week is common with much longer hours during peak season). We understand that 12 to 16 hour days are common in the dairy sector along with rosters that have 11 days on and three days off.

"These hours have long term health consequences and make work more dangerous. Agriculture is one of our most dangerous industries with 18 deaths in 2013. The Government says it is committed to health and safety but these changes and others such as the removal of guaranteed rest breaks go in exactly the wrong direction. New Zealand was the first country in the world to introduce a 40 hour working week in 1840. We are a long way from that ideal now and getting further by the day."

Sissons says, "Employers in other industries are likely to change to salarisation if it help them cut costs. The Government is about to pass laws allowing small employers to opt out of protections for so-called 'vulnerable workers' (cleaners, food workers, orderlies and others). These workers are in industries with a well-documented history of screwing workers down to the lowest possible rates. Cleaning firms, for example, compete on razor sharp cost margins and this proposal would allow them to count allowances such as overtime and night work towards the minimum fortnightly wage by putting workers on salaries. Like the removal of entitlements to meal breaks, the Government is helping bad employers to shave their profits out of the most vulnerable workers' pay packets."

"The CTU thinks that the Government should be protecting migrants and other vulnerable workers from long hours and lower pay not facilitating these through changing the law."


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