SkyCity Entertainment Group says it will pay its New Zealand staff at least $20 an hour by 2020, a move it says will increase pay for about 1750 people.

The official minimum wage is set to increase to $16.50 from next month.

The $20 by 2020 initiative would increase pay for the company's lowest-paid employees by 21 per cent in the next three years, benefiting 46 per cent of its staff.

Group chief executive Graeme Stephens said SkyCity had been considering the change for 18 months.

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"We know living in New Zealand is expensive, and that the hospitality industry is generally geared to lower wages," Stephens said.

"We have a commitment and a responsibility to sustainable career paths at SkyCity, and we want our staff to grow their careers with us."

Stephens said SkyCity was the first major listed company to commit to a $20 an hour minimum wage, which the Government has indicated it plans to introduce by 2021.

"As a customer-facing company we want our staff to be happy and engaged in their work, so this move also makes good business sense," he said.

"But more importantly, it's just the right thing to do.

"I'm pleased our plans appear to align with government policy in this area, and that we are able to achieve this earlier."

Under the new wage plan, staff earning less than $20 an hour would get a boost in their pay packets of 7 per cent every year between now and 2020.

The commitment does not change existing entitlements or wage agreements.

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Stephens said it wasn't a complete solution, but it was a step in the right direction.

Restaurant Association chief executive Marisa Bidois said as the largest single hospitality employer in New Zealand, SkyCity's decision could pave the way for other businesses.

"Many hospitality businesses are now understanding that paying slightly higher wages will not only have a significant impact on the wellbeing of staff but also on attracting and retaining good people," Bidois said.

Michelle Baillie, general manager, SkyCity Hamilton, said the move will affect a large number of the organisation's staff who are based in the city.

"The announcement today will directly benefit 227 SkyCity Hamilton staff members, 65 per cent of the workforce, who work predominantly in frontline positions within the casino and across our bars, restaurants and bowling alley.

"They all work hard to provide great experiences for our customers and we couldn't be
successful without them."

Unite Union spokesman John Crocker said the announcement was good news for its members.

"We're pleased SkyCity has shown the initiative and is leading the way towards more sustainable wages for low-paid workers," Crocker said.

"These increases will make a positive difference to the lives of many of our members and we encourage other companies to follow SkyCity and not wait for legislation to force them to act."