[New Zealand] Hamilton City Council Will Pay Minimum Wage To Contractors

03 JUN 2020

Hamilton City Council has agreed to extend paying the $20 per hour minimum wage to all staff employed by the organisation’s contractors, Stuff reports.

The decision to do so was not easily reached and, during an online meeting on May 28, councillors debated for some time the benefits of giving this boost to the city's lowest-paid workers versus its fiscal responsibility to ratepayers.

At present, it is not known whether the cost of the wage increase - estimated at anywhere between $258,000 to $859,000 per year - will be paid for through rates or through debt.

A stipulation that the wage should only be applied to contracts with a term of three years or more will now be included as a condition in the negotiation process from July 1 for all new contracts tendered by the council. 

The $20 minimum wage has already been introduced for staff employed by the council’s cleaning and security contractors in April and September 2019 respectively.

With such increases, the council has remained ahead of the Government, which raised the national minimum wage to $18.90 this April. The Government will raise the national minimum wage to $20 in April 2021.

During the debate, Councillor Maxine van Oosten reportedly said the estimated cost to the organisation was "miniscule".

"But to workers, it's having a holiday or not. It's saving for retirement or not...or even being able to turn the heater on, on these cold mornings."

Contractors employing staff would be able to update the details on their payroll accounts easily to account for the increase, Ms van Oosten said. "We are doing the right thing by our community."

Deputy mayor Geoff Taylor argued that such generosity was inappropriate, given the economic climate, "I have never been a fan of getting ratepayers to fork out for what the contractors should be paying.

"There is actually a story coming ... Investing in the city is one thing. Being reckless with someone else's money is another. We are asking ratepayers to pay over the odds for people not employed by this council."

Councillor Dave Macpherson said it was confusing to have a disparity in pay rates between different kinds of staff employed by the council's 70 contractors.

"It's not many low-paid workers that are under our umbrella."

Councillor Kesh Naidoo-Rauf said it was wrong for the council to put any undue pressure of any kind on employers.

"I think it's unfair on smaller contractors. I don't think we understand the implications and the challenges contractors face."

Councillor Margaret Forsyth said she did not believe the council had consulted widely enough on the proposal before putting it to councillors for a decision.

Ms Forsyth believed that as stakeholders, the Waikato Chamber of Commerce, the Property Council and Waikato-Tainui should have has their input sought beforehand.

She added, "My next point is where are we going to get those funds from?"

Source: Stuff