Axe hovers over youth pay

The number of unemployed New Zealanders in the 15- to 24-year-old bracket stands at 61,700. Photo / Christine Cornege

Firms will be able to give more recruits less than the minimum wage - and for longer.

The National Government will unveil the details of its version of the "youth wage" today - allowing employers to pay less than the minimum wage to many young workers, including those starting new jobs or going to work after being on a benefit.

It is understood Ministers Kate Wilkinson and Steven Joyce will announce details, including the start date, of the Starting Out Wage, which Prime Minister John Key announced during the election campaign last year as one of its initiatives to tackle high youth unemployment.

It will allow bosses to pay 80 per cent of the minimum wage - or $10.80 an hour - for up to six months when they take on a 16- or 17-year-old worker, regardless of whether it is that teenager's first job or not.

It will also apply to 18- and 19-year-olds who have been on a benefit for more than six months, and 16- to 19-year-olds who are also doing 40 or more industry training credits.

The announcement will be made alongside a further announcement about skills training and employment, including new "skills hubs" in Christchurch for trades training.

The official youth wage was abolished in 2008, but the current system does provide for 16- and 17-year-olds in their first jobs to be paid $10.80 an hour for up to three months or 200 hours, as well as those doing 60 credits or more as a training course.

Announcing the policy last year, Mr Key had said the lower wage would give many youth "a much-needed foot in the door" and encourage employers to take on youth, rather than more experienced workers.

But Labour argued that it would instead send young workers over to Australia where the pay was higher.

The latest Household Labour Force Survey showed 61,700 15- to 24-year-olds were unemployed - up from 41,100 four years ago.

The Youth Wage comes on top of a package of wage subsidies of up to $21,000 a year for employers who take on high-risk youth, such as former prisoners.

The Starting Out Wage

Paying 80 per cent of the minimum wage to:

* 16- to 17-year-olds for first six months with a new employer.
* 18- to 19-year-olds going to work after six months on a benefit.* 16- to 19-year-olds doing more than 40 credits a year on a training course.