Warning on wages

Top hospitality workers on contract can lose the benefits of wages. Photo / Thinkstock

Workers close to entering management ranks are being warned to carefully consider their employment agreements - they risk earning less if they don't compare collective and individual contract employment rates.

Two employment specialists are running seminars around the country on key trends in wages and salaries, and they say wages are outstripping salaries for many tradespeople in specialist roles nearing management.

Fred Adelhelm, of Adelhelm & Associates which does a lot of employment-mediation work with unions, and Susan Doughty, of dsd Consulting, whose work includes contract negotiations for senior salaried staff, have for four years combined to run seminars for employers summarising trends. This year, they have worked with 72 of New Zealand's largest employers.

They say increasing numbers of workers, and employers, are noticing a "pay-curve headache" - where talented staff moving off wages on to individual employment agreements (IEAs) can fall behind. Employers need to avoid these problems to stop disharmony in the workplace, they say.

Adelhelm says highly specialised staff who move into first-in-line relieving management positions can drop up to 5 per cent behind their colleagues in earnings if they move to individual contracts without careful consideration.

As salaried staff they give up the allowances that a collective entitles them to and sometimes rises in base rates don't compensate for that loss.

The two spoke at seminars in Auckland and Wellington recently, with another in Christchurch this week. One employer in the hospitality sector told them he had recognised the issue and had had to raise salaries for individual contract workers in fringe management because of the disparity.

Adelhelm and Doughty refer to this segment of workers as the "third workforce", caught between wages and salaries.

"Jobs in this area are seen as the first steps of a proper career path," Doughty says. They are likely to be key specialists in their field, experienced and trade-qualified and nearing team-leader level.

"While boosting the salaries of like employees on IEAs might look like a simple solution, problems start when you compare their salaries to other roles within the organisation that are of a similar size and complexity." Cohesiveness in the workplace could be affected.

The Herald on Sunday found one worker caught in the conundrum. James, who didn't want to give his surname, was formerly a lathe operator. He was asked to specialise in programming highly technical systems. The rise up the union grading scale meant that with overtime and allowances, his take-home pay regularly surpassed that of the foreman.

"I would have seen a salaried foreman's position as a career step - an investment in the future. I knew the salary offered a much better base pay. But if the boss wasn't able to better the take-home pay I would have said 'no thanks - find someone else for the job'."