MINIMUM WAGE

ALWU's first campaign was to ensure law firms actually complied with the law and paid its workers at least minimum wage. 

 

This campaign first arose from several self-reports to ALWU from legal workers who were concerned they were working for less than the minimum wage when their hours worked were measured against their salary levels.

The problem was confirmed after ALWU conducted its first Employment Information Survey, where half of respondents who worked in large law firms reported either actually having, or thinking they had, worked for less than the minimum wage.

Read on to find out more about:

The basics

How do I know if I've worked for less than minimum wage?

What counts as work?

What counts as pay?

ALWU's recommendations

The basics

The minimum wage is currently $18.90 per hour, per cl 4 of the Minimum Wage Order 2020.

This means:

  • If you are paid a wage (that is, by the hour), you must be paid at least $18.90 for every hour you work.

  • If you are on a salary paid daily, you must be paid at least:

    • $151.20 per day; and

    • $18.90 for every hour over 8 hours that you work in a day.

  • If you are on a salary paid weekly, you must be paid at least:

    • $756 per week; and​

    • $18.90 for every hour over 40 hours that you work in a week.

  • If you are on a salary paid fortnightly (or longer), you must be paid at least:

    • $1,512 per fortnight; and

    • $18.90 for every hour every 80 hours that you work in a fortnight.

Note that this is true even if you are contracted to work less than 8 hours a day or 40 hours a week.

Example:

Amy is offered a job.  The contract says she must work 37.5 hours per week.  It also says that her salary will be $36,855, paid weekly at $708.75 per week (before tax and other deductions). 

 

The employer says this is okay because she is being paid $18.90 per hour for the 37.5 hours she is contracted to work per week. 

This is incorrect because the Minimum Wage order simply says that if you are paid weekly, you must be paid $756 per week.  It does not matter that you are contracted to work less than 40 hours per week.

Not also that minimum wage is calculated based on hours worked for the length of your pay period, up to a maximum period of a fortnight.  This means that employers cannot average out the number of hours you worked over a longer period of time to calculate whether they complied with minimum wage law.

Example:

Bob is on a salary of $48,000.  He usually gets paid $1,846.15 every fortnight (before tax and other deductions). 

 

During a particularly busy period, Bob works 11 hours every day for two weeks to meet a complex litigation deadline.  His hours return to normal the next fortnight.

When Bob asks why he was not topped up for his extra hours for that busy fortnight, his employer tells him that they do not need to because he worked fewer hours the following following fortnight, so on average they are still paying him more than minimum wage.

This is incorrect because Bob must be paid the minimum wage per fortnight.  Since he worked 110 hours over that busy fortnight, he was only paid $16.78 per hour for that period.  To comply with the Minimum Wage Act, his employer must pay him an extra $232.85, to get him up to $2,079 ($18.90 x 110 hours) for that fortnight.

 
 
How do I know if I've worked for less than minimum wage?

This table shows how many hours you would have to work per pay cycle, based on your salary, until you are working at minimum wage. 

If you think you have worked for more than the hours listed for your salary and pay period, talk to your employer, or get in touch with us.

 
What counts as work?

"Work" is not limited to time actively producing work, and certainly not limited to billable time.  You are working if there are constraints on your freedom as an employee, or if what you are doing benefits your employer.

This means that the number of hours worked includes all time spent:

  • waiting for work;

  • taking toilet breaks;

  • filing;

  • billing;

  • dealing with email-related administration;

  • attending meetings;

  • organising firm social events;

  • contributing to firm branding (such as writing articles or preparing seminars); or

  • taking part in team building activities.

It also includes two paid ten-minute rest breaks (assuming you work a seven- to ten-hour day).

It does not include your unpaid lunch break, but only if you take it—if you work through lunch and eat at your desk, that counts as hours worked.

 
What counts as pay?

All salary and wages must be paid in money.

This means your employer cannot simply give you a Prezzy card or give you time off in lieu when you have worked below minimum wage.  They must top up your pay for the pay period to at least match the minimum wage for every hour you worked in that period.

Kiwisaver cannot be included in the minimum wage calculation. 

Often, firms will contract to pay you a "salary" that includes the employer's Kiwisaver contribution.  For minimum wage purposes, Kiwisaver must be subtracted from that figure.  You must be paid at least minimum wage, plus the employer's Kiwisaver contribution.

ALWU's recommendations

ALWU recommends all legal employers adopt our Minimum Wage Best Practice Policy.

In summary, employers should:

  • state clearly that it will pay:

    1. at least the minimum sum per pay period as required by the Minimum Wage Order; and​

    2. at least the minimum hourly rate required by the Minimum Wage Order for each hour worked over the relevant threshold for the pay period;

  • keep accurate time records for all hours worked;

  • adopt a "clock in, clock out" system;

  • consistently review employees' time and wage records;

  • inform employees that they may seek a review of their time and wage records at any time;

  • notify the manager of any employee working more than 80 hours a fortnight and seek an explanation as to why this occurred;

  • acknowledge that working for more than 80 hours a fortnight may negatively impact employees in ways that cannot be resolved by a top-up payment.

 

"It is vital that students and young professionals work in places that treat them with respect and support them in the early years of their career.  ALWU will ensure young lawyers' voices are heard."

Fletcher Boswell  New Zealand Law Students' Association, 2019