News Article

latest news in employment law

Discriminatory Minimum Wage Exemptions To End

Published 02 Aug 2023

Disability Issues Minister Priyanca Radhakrishnan, has stated the New Zealand government will put an end to the "discriminatory" practice that allows employers to pay disabled workers less than the minimum wage.

The system currently permits employers to obtain Minimum Wage Exemption permits, which enable them, under certain circumstances, to pay a disabled employee an hourly rate below the minimum adult wage rate (currently $22.70). This practice will be abolished by mid 2025, as announced by Radhakrishnan last week.

The minister stated that some disabled individuals in New Zealand are currently being paid below the minimum wage, and this situation must be rectified immediately. To address this issue, the Government will replace the minimum wage exemption permits with a wage supplement. Approximately 800 disabled workers will benefit from this change, receiving an increase in their wages to meet the minimum wage standard. This measure aims to support disabled individuals in transitioning from reliance on welfare benefits to gainful employment.

The existing system has faced significant criticism from unions, with Glenn Walker, co-convener of the Deaf and Disabled Network, stating that it currently legalises discrimination against disabled workers, perpetuates the perception of disabled individuals as being worth less than others, and contributes to high poverty rates within this community. On average, working-aged disabled people in New Zealand currently earn $662.00 a week, significantly lower than non-disabled individuals' average of $1,125.00 per week. Workplace discrimination and limited access to job opportunities are cited as major factors contributing to the high poverty rates among disabled individuals.

Ending the exemption is seen as a crucial step toward providing disabled individuals with equal access to work opportunities and the rights enjoyed by other workers in New Zealand.