Minimum Wage and Remuneration Amendment Bill
There is before parliament a private members bill called the 'Minimum Wage and Remuneration Amendment Bill', introduced by Darien Fenton, Labour List Member and Member of the Transport and Industrial Relations Parliamentary Committee which will in effect guarantee a contractor (rather than an employee) a minimum return for the work they have done. This will be irrespective of what may have been agreed between the contractor and the principal prior to the work being undertaken.
It has yet to be passed and therefore may be changed, but in whatever form it passes in the effect will generally be the same.
Purpose
The aim of the Bill is to amend the Minimum Wage Act 1983 (the Act) to extend its provisions to apply to payments under a contract for services that are remunerated at below the minimum wage. The name of the act will be changed to the 'Minimum Wage and Remuneration Act'
Background
Currently certain types of work, such as pamphlet deliveries, are not subject to any minimum wage requirements because remuneration is paid under a contract for services. The Bill provides for such contractors to be paid not less than a minimum rate, equivalent to the minimum wage. As is the case for the minimum wage, the rate can be either hourly or on a piece rate basis.
The effect of the bill is to give the Governor-General power, by Order in Council, to make regulations prescribing the minimum rates of remuneration payable to any person working under a contract for services.
Regulations made may define minimum rates of remuneration by reference to the age of the person performing the services or by piecework.
Any minimum rate of remuneration may be prescribed as a monetary amount or as a percentage of any other minimum rate of remuneration prescribed under the regulations
Despite anything to the contrary in any enactment, agreement, or contract for services, every person in respect of whom a minimum rate of remuneration has been prescribed under the Minimum Wage Act 1983, is entitled to receive payment for services at not less than that minimum rate.
MINIMUM WAGE AND REMUNERATION AMENDMENT BILL 2006
Purpose
The aim of the Bill is to amend the Minimum Wage Act 1983 (the Act) “… to extend its provisions to apply to payments under a contract for services that are remunerated at below the minimum wage”1.
Background
“Currently certain types of work, such as pamphlet deliveries, are not subject to any minimum wage requirements because remuneration is paid under a contract for services. The Bill provides for such contractors to be paid not less than a minimum rate, equivalent to the minimum wage. As is the case for the minimum wage, the rate can be either hourly or on a piece rate basis”2 (see also Clause 4, the “purpose” clause).
Main Provisions
Commencement
The Bill comes into force on the day after it receives the Royal assent (Clause 2).
Minimum Wage Act 1983 changes name
The Bill provides that the Minimum Wage Act 1983 changes its name to the Minimum Wage and Remuneration Act 1983 (Part 2, Clause 5, changing the name of the Act to the Minimum Wage and Remuneration Act 1983).
Prescription of minimum remuneration
The Bill provides that the Governor-General is able, by Order in Council, to make regulations prescribing the minimum rates of remuneration (i.e. any payment made under a contract for services) payable to any person working under a “contract for services”3. The regulations may define minimum rates of remuneration by reference
1 Minimum Wage and Remuneration Amendment Bill, 2006 No 69-1, Explanatory note, p. 1.
2 Ibid.
3 A contract for services is a contract under which an independent contractor supplies services to another in return for a contract fee. It is to be contrasted with a contract of service where an employee agrees to work for another person (the employer) in return for some benefit or remuneration from the employer (the latter contract is also called an employment contract). NZ Parliamentary Library, Bills Digest No. 1407 2 to the age of the person performing the services or by "piecework" 4 (Part 2, Clause 7, inserting New Section 4A(1)-(3) into the Act).
4 Piecework is where a worker is paid not by the time worked but by the piece or thing produced by the work.
Payment of minimum remuneration
The Bill provides that despite anything to the contrary in any enactment, agreement, or contract for services, every person in respect of whom a minimum rate of remuneration has been so prescribed in regulations, is entitled to receive payment for services at not less than that minimum rate (which may be prescribed as a monetary amount or as a percentage of any other minimum rate of remuneration prescribed under the regulations) (Part 2, Clause 8, inserting New Section 6A into the Act; Clause 7, New Section 4A(3) of the Act).
Penalties and jurisdiction
Section 10 provides that every person who makes default in the full payment of any wages payable by that person under the Act and every person who fails to otherwise comply with the requirements of this Act is liable to a penalty recoverable by a Labour Inspector, and imposed by the Employment Relations Authority, under the Employment Relations Act 2000.
The Bill amends this provision by inserting 'or remuneration' after 'full payment of any wages' and by adding the followin: “the provisions of the Employment Relations Act 2000 apply, with the necessary modifications, to the recovery of minimum remuneration as if the minimum remuneration were minimum wages” (Part 2, Clause 9, amending Section 10 of the Act, and adding new subsection (2) to Section 10 of the Act).
Consequential amendments to other enactments
The Bill provides that all references to the Minimum Wage Act 1983 in any Act, regulations, order, or other enactment or in any agreement, deed, instrument, application, notice, or other documents whatsoever must, unless the context otherwise requires, be read as references to the Minimum Wage and Remuneration Act 1983, as the case may be (Part 2, Clause 10, amending the Schedule to the Act).
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