Youth rates bill a step closer
Labour Minister Simon Bridges (file)
A bill setting up a lower minimum wage for young workers is a step closer to becoming law after being reported back from a select committee with only minor changes.
The Minimum Wage (Starting-out Wage) Amendment Bill will establish a "starting out" wage of $10.80 an hour, or 80 percent of the adult minimum wage, which is currently $13.50 an hour.
The lower wage would apply to 16- and 17-year-olds for their first six months in a job, 18- and 19-year-olds entering the workforce after more than six months on a benefit, and 16- to 19-year-olds in certain training.
In its report, parliament's transport and industrial relations select committee recommended the bill come into effect on May 1, instead of April 1 as originally intended, along with changes to defintions.
Labour Minister Simon Bridges says the law change will give employers a "real incentive to take on our youngest and most inexperienced workers and provide them with the skills and work experience they need".
The Labour Party is opposed to the legislation, which it calls "draconian", and disappointed by the select committee report.
Labour's Darien Fenton says it's unfair that young people will be paid less simply because of their age, and despite gaining experience in one job, they can be returned to youth rates in another job.
"Paying young workers to do the same job less just because of their age is discriminatory and unfair and will have little, if any, impact on youth employment levels," she said.
"It will, however, increase youth hardship and will particularly affect those who are returning to work after being on a social security benefit. It will discourage young people from seeking work and encourage bad employment practices among employers."
The select committee received 531 submissions on the bill, with only nine in favour, Ms Fenton says.