Workplace Relations and Safety Minister Iain Lees-Galloway today announced the minimum wage will rise 75 cents to $16.50 per hour on April 1.
The 4.8 per cent increase will directly benefit 164,000 people, and will increase wages throughout the economy by $129 million per year, Lees-Galloway said in a statement.
The government first announced this planned minimum wage lift in October, when its coalition and partnership agreements were released.
Both Labour and its partner NZ First campaigned on increasing the minimum wage and formally agreed to "progressively increase the minimum wage to $20 per hour by 2020, with the final increase to take effect in April 2021."
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The starting out and training hourly minimum wages for youth workers will increase to $13.20 from $12.60 per hour, remaining at 80 per cent of the adult minimum wage.
The government will abolish starting-out rates and consider changes to the training wage by the end of the first year of its current term, he said.
"The government is committed to a high-performing economy that delivers good jobs, decent work conditions and fair wages," Lees-Galloway said. "
Raising the minimum wage to $16.50 next year was one of the Government's top priorities for the first 100 days, and we are committed to increasing the minimum wage to $20 by 2021.
"We will continue to review the minimum wage each year, and economic conditions will be taken into account when setting the new rate of the minimum wage. This consistency gives employers and employees certainty, and minimises potential negative effects of increasing the minimum wage too sharply."