What you need to know about: Pay

Who should read this?

Employers paying adults, new entrants to the workforce, trainees and children, whether they are full-time, part-time, permanent, casual or fixed-term employees; also employers who employ people with disabilities.

Why is it important?

To ensure that employees are paid fairly
To help the efficient running of your business
To avoid employment relationship problems

What you need to do

There are three main steps involved in paying wages.

Understanding minimum pay entitlements for all employees including:
- adults
- trainees
- new entrants
- children, and
- people with disabilities.
Ensuring correct calculation of wages:
- what you need to consider when working out pay
- when wages should be paid
- how they should be paid
- managing deductions, and
- working out holiday pay.
Keeping accurate records.

Pay checklist

If you answer no to any of the following questions you may need more information.

General Minimum Entitlements	Yes	No	n/a
Do you know what the adult minimum wage rate is and who it applies to?
Do you know what the new entrants’ minimum wage rate is and who it applies to?
Do you know what the training minimum wage rate is and who it applies to?
Do you know that there is no minimum wage for employees under 16 years old?

Employing people with disabilities	Yes	No	n/a
Do you know that you may be able to apply for a minimum wage exemption permit when employing people with disabilities?
Do you know how to apply for a minimum wage exemption permit?
Do you know how to show the wage is fair?

Keeping records	Yes	No	n/a
Do you know what information must be kept on pay records?
Do you have a system in place to keep these records?

Working out pay	Yes	No	n/a
Do you know when and how wages should be paid? on the day and at the intervals agreed with the employee paid in cash with some exceptions
Do you know that deductions cannot generally be made from an employee’s wages, except in the following circumstances: employee has given their written consent provided for in employment agreement court directs that deduction can be made union fees bargaining fee arrangement deductions required by law (e.g. child support payment) collective agreements can set out deductions if board or lodging are provided (15% for board or 5% for lodging)?
Do you know how to work out annual holiday pay? calculating “ordinary weekly pay” and “average weekly earnings” must be paid in addition to the minimum wage if “pay-as-you-go” applies, it must be a separate identifiable part of your employee’s pay
Do you know what to do if you need to recover wages that have been overpaid?
Do you know what to do if an employee is seeking to recover money owed?
Do you know how to calculate final pay?

Managing problems & disputes	Yes	No	n/a
If there are problems in relation to pay which could lead to disputes, such as a personal grievance, do you know where to go to for help and advice?

Disclaimer & Acknowledgement

The material featured on this page was sourced directly from the Department of Labour and is subject to Crown copyright protection.

The Crown copyright protected material may be reproduced free of charge in any format or media without requiring specific permission. This is subject to the material being reproduced accurately and not being used in a derogatory manner or in a misleading context. Where the material is being published or issued to others, the source and copyright status should be acknowledge.

These guidelines provide general information and guidance. The Employment Relations Centre does not accept any responsibility or liability, whether in contract, equity or tort, or under any other legal principle, for any direct or indirect losses or damage of any kind arising from the use of this guide. This includes any action taken as a result of reliance on any part or all of, the information in this guide. It is also noted that:
1. The Employment Relations Centre may change, add to, delete from, or otherwise amend the content of these guidelines without notice.
2. The Employment Relations Centre gives no warranties, guaranties or undertakings as to results that may be achieved from use of the information contained in these guidelines.
3. These guidelines are not intended to address the specific circumstances of any particular individual or entity nor are they professional or legal advice.