Young, but not always fancy free

A bid by ACT MP Sir Roger Douglas to introduce a youth pay rate into the minimum wage will not be supported by the government, it was announced yesterday. The idea behind the proposal was to encourage employers to take on young workers but there was no support for the idea from the National Party, which does not believe it would relieve youth unemployment.

In our view, the legislation is complex enough, and given the government's commitment to relieve burdens on business, it was right to reject what would have been a further layer of complexity.

The current minimum wage in New Zealand for almost all workers of 16 and over is currently $12.50, rising to $12.75 from 1 April 2010. We say "almost all" because there are exceptions:

1 The legislation allows employers to pay below the minimum wage (but no less than $10.00 an hour, rising to $10.20 an hour from 1 April 2010) when the new entrant is a worker who is 16 or 17 years old, until they have completed three months or 200 hours of employment, whichever is shorter, or if they have been supervising or training other workers. The three months or 200 hours includes employment undertaken with different employers but excludes any employment undertaken before reaching 16 years old.

2 The training minimum wage applies to employees aged 16 and over who are doing recognised industry training involving at least 60 credits a year. The minimum rates are the same as for new entrants.

3 A Labour Inspector may issue a minimum wage exemption where it would enable a person with a disability to gain employment and a range of other criteria are satisfied.

Apart from the minimum wage, the Human Rights Act 1993 protects employees aged 16 or over from being discriminated against in their employment on the grounds of age. That means that a young person cannot be treated less favourably than other employees on the grounds of age, so long as he or she has the same or substantially similar capabilities as other employees who are employed in the same or substantially similar circumstances.

In other words, you can pay a young person aged 16 or over less than other workers (but not less than the relevant minimum wage) if you are reasonably satisfied that their capabilities are less than those of older workers. As they learn and develop you would have to keep the situation under review and equalise their pay and benefits when their performance is at a par with that of older workers.

We all remember our first proper job. Most of us were enthusiastic and threw ourselves into it, willing to learn - and we did, fast. In return, being employed gave us independence and helped cement our place in the adult world. Youth unemployment is a nation wide problem that won't be solved by tinkering with wage rates. Employers need to open their eyes to the benefits of employing young, enthusiastic and creative people and not make assumptions based on age alone. (On the other hand, as this writer is nudging 50, I'm bound to comment that the young don't have the monopoly on enthusiasm and creativity!).