SALARIES don’t always save you in the long run.

General / 25 October 2015
SALARIES don’t always save you in the long run.

All employees are required to pay their staff at least minimum wage, currently $13.75 per hour.  A Stratford farm owner has been ordered to pay his former employee $6,473.77 for failing to meet this obligation.
Mr Almao was employed as a Farm Assistant by Mr and Mrs Whyte.  He worked for the Whytes between November 2010 and October 2012.  Mr Almao started on a salary of $30,000 per annum.  In April 2010 his salary increased to $32,000 per annum.  During the dry season (May – July) Mr Almao would work between 38-44 hours per week.  At all other times he would work between 49-60 hours per week.
Labour Inspector
Mr Almao lodged a complaint with the Ministry of Business, Innovation and Employment concerning his rate of pay.  Ms Feeny, Labour Inspector, found the Whytes had not maintained accurate wage, time and leave records and had failed to pay at least the minimum wage.  The Whytes were required to pay Mr Almao $6,473.77 in wage arrears.
Employment Relations Authority
Mr Whyte objected to Ms Feeny’s conclusions.  He put forward that weekly wages paid under the minimum wage during busy periods should be offset against wages during the dry season above the minimum wage ie., the Whytes implemented an averaging formula across the whole year.
The Authority agreed with Ms Feeny’s calculation and rejected the Whyte’s averaging approach.  Mr Almao was paid in equal weekly instalments.  The Authority therefore compared the hours worked in any one week to that weekly salary payment.  Using this method the Authority calculated that when Mr Almao worked over 49 hours in a week, his weekly salary payment was below minimum rate.  It concluded that only 42% of his employment met the minimum rate.

HELD:  Employer cannot average out salary payments made for weeks requiring less work against weeks where hours worked are below the minimum rates.
EFFECT:  If an employee is working 60 hours per week, they must receive at least $825 (gross) for that week.  That is $13.75 per hour worked.  If an employer fails to pay the minimum rate for each pay period worked, they will be required to ‘top up’ the employee’s pay.

Farmers in particular should be aware of the fluctuating hours due to seasonal variation and ensure the employees are receiving the minimum rate for every pay period.

We would also recommend that employers keep accurate records of when someone works including starting and finishing times,  breaks, any holidays or leave worked or taken, and all payments made.  This will ensure employers can prove when an employee worked and what they were paid for in case it is later challenged.

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