[New Zealand] Minimum wage exemption for disabled workers remains in place

[New Zealand] Minimum wage exemption for disabled workers remains in place
13 Apr 2022

A policy that means disabled people can be paid less than the minimum wage is still in place despite the New Zealand Government announcing it would be scrapped three years ago, 1News reports.

In February 2019, Disability Issues Minister Carmel Sepuloni said she intended to replace the minimum wage exemptions with a wage subsidy.

Disability advocates say they haven't heard anything further since a consultation the same year.

IHC's Janine Stewart says it's "embarrassing internationally" that the policy is still in place.

"We should in the sector feel absolutely outraged that nothing has happened. The announcement has been made, get on with it," Stewart says.

Under the Minimum Wage Act, businesses can apply for an exemption to pay an employee with a disability less than the minimum wage on the basis that they are less productive.

There are around 900 people with the exemption, with 70 per cent being paid less than $5 an hour and 25 per cent paid less than $2. All before tax.

In one instance, one disabled worker was paid 89 cents an hour, though most are eligible for a benefit.

There's very strong opposition to changing the exemptions, with a Cabinet paper from late 2019 saying "a wage subsidy was feasible but there are risks and challenges".

Altus Enterprises CEO Martin Wylie described the proposed changes as "misguided" and said they will result in job losses. Altus employs 95 people on minimum wage exemptions, many of whom can't find work in the open market.

"This business is a charity and has been around for 50 odd years. The only reason it exists is to provide employment for these individuals," Mr Wylie said.

While the Government would foot the bill to top up workers' wages under a subsidy, businesses would incur extra costs like increases to KiwiSaver contributions.

"They've been at this for four years and clearly they're struggling to find a way to remove this and replace it with anything workable because I don't think there is anything workable," Mr Wylie said.

Carmel Sepuloni told 1News that the issue was "still on the radar". 

"I agree it is discriminatory and that's why it's a commitment that our Government have made to change that over the course of this term. We have some time to do that," Ms Sepuloni said.

The Minister said there were budgetary considerations at play, "We can't do everything in the first budget or even the second budget but we do have three to be able to get them over the line".


Source: 1News

(Quotes via original reporting)

A policy that means disabled people can be paid less than the minimum wage is still in place despite the New Zealand Government announcing it would be scrapped three years ago, 1News reports.

In February 2019, Disability Issues Minister Carmel Sepuloni said she intended to replace the minimum wage exemptions with a wage subsidy.

Disability advocates say they haven't heard anything further since a consultation the same year.

IHC's Janine Stewart says it's "embarrassing internationally" that the policy is still in place.

"We should in the sector feel absolutely outraged that nothing has happened. The announcement has been made, get on with it," Stewart says.

Under the Minimum Wage Act, businesses can apply for an exemption to pay an employee with a disability less than the minimum wage on the basis that they are less productive.

There are around 900 people with the exemption, with 70 per cent being paid less than $5 an hour and 25 per cent paid less than $2. All before tax.

In one instance, one disabled worker was paid 89 cents an hour, though most are eligible for a benefit.

There's very strong opposition to changing the exemptions, with a Cabinet paper from late 2019 saying "a wage subsidy was feasible but there are risks and challenges".

Altus Enterprises CEO Martin Wylie described the proposed changes as "misguided" and said they will result in job losses. Altus employs 95 people on minimum wage exemptions, many of whom can't find work in the open market.

"This business is a charity and has been around for 50 odd years. The only reason it exists is to provide employment for these individuals," Mr Wylie said.

While the Government would foot the bill to top up workers' wages under a subsidy, businesses would incur extra costs like increases to KiwiSaver contributions.

"They've been at this for four years and clearly they're struggling to find a way to remove this and replace it with anything workable because I don't think there is anything workable," Mr Wylie said.

Carmel Sepuloni told 1News that the issue was "still on the radar". 

"I agree it is discriminatory and that's why it's a commitment that our Government have made to change that over the course of this term. We have some time to do that," Ms Sepuloni said.

The Minister said there were budgetary considerations at play, "We can't do everything in the first budget or even the second budget but we do have three to be able to get them over the line".


Source: 1News

(Quotes via original reporting)

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