Employers will be able to pay 16-to-19-year-olds in new jobs $11 an hour after a controversial bill was passed into law by one vote.
Unions immediately decried the adoption of a youth wage, which is nearly $3 below the minimum wage, but the National-led Government argued it would increase opportunities for young people.
National, Act and United Future backed the move to allow a "starting-out wage" to be set at no less than 80 per cent of the minimum wage for young people - $11 at current rates. Employers will be able to apply it from May 1.
Labour Minister Simon Bridges said the change would give employers an incentive to take on young workers and also give teenagers an opportunity to get on the job ladder.
He told Parliament: "With a steady work history behind them, young people ... will be seen as less risky for new employers to take on."
He criticised a Labour-introduced new entrance wage which limited the time workers could stay on a lower rate to 200 hours or three months.
The minister cited research claiming this was rarely used and may have cost thousands of jobs.
Labour Party labour spokeswoman Darien Fenton said the change was an unjustified discrimination against younger people which redefined New Zealand as a low-wage economy and increased the wage gap with Australia.
"This bill assumes that there are thousands of employers out there just waiting to offer jobs to young people ... that's a false assumption.
"Unfortunately what this bill does is ... go back to the past where low wages are the norm, where productivity is increased by having more people paid less and working longer."
Public Service Association national secretary Richard Wagstaff said the legislation signalled to young people that they were second-class workers despite carrying out the same job as older employees.
"We have a minimum wage for a reason and while it is still not a living wage, all New Zealanders should be entitled to it without discrimination."
Labour, Greens, New Zealand First, the Maori Party and Mana opposed the bill.
Can be paid to:
* 16 and 17-year-olds in their first six months of a new job.
* 18 and 19-year-olds who have been on a benefit for six months or more.
* 16-to-19-year-olds in a recognised industry training course.