Market rates set pay levels says council

Few Masterton District Council employees are on minimum wage and most workers' remuneration is set according to market rates, officials say.

However, as debate grows about the nation's workers receiving fair pay, the council says it's unwilling to dictate that its contractors be paid a "living wage" of $18.40 an hour, as the extra cost would be borne by ratepayers.

Auckland and Wellington councils have agreed to investigate the feasibility of adopting a "living wage" of $18.40 an hour - proposed by a coalition of union and community groups. Nationwide, calls for fairer pay are growing.

Masterton District Council finance manager David Paris said council used a market rate-based system to set remuneration for employees, with pay tied to the skills needed for each position.

Few positions were paid at or around the current minimum wage and council did not take into account individuals' personal circumstances when setting pay rates, Mr Paris said.

"The council would not look to dictate remuneration policies to its contractors - if it did, the resulting cost penalty would be paid directly by the ratepayers."

Masterton District Council has 75 permanent employees and employs outside contractors to deliver such services as waste management, roading, parks, pools, water and sewer maintenance and cleaning, Mr Paris said.

Wages and salaries paid by the Masterton council would total about $4.7 million for the 2012/13 year.

South Wairarapa District Council chief executive Dr Jack Dowds would not comment on the living wage issue.

Corporate support manager Paul Crimp said the council used market survey data to set salaries and wages for its staff - as required by the collective employment agreement.

"We do not plan to deviate from this as we are contractually bound to follow this methodology," Mr Crimp said.

Carterton District Council representatives did not respond.

Wellington Mayor Celia Wade-Brown has said she "would very much like to move towards a living wage".

But any changes would be gradual, subject to a feasibility study and after consulting ratepayers.

Auckland Mayor Len Brown said his council would consider a report by Lower Hutt's Anglican Family Centre calculating the wage required for a couple with two children to "live with dignity and to participate as active citizens in society".

Initial Auckland Council figures show it would cost $2.5 million a year to raise the wages of 1544 people paid under $18.40 an hour as direct employees of the council and all except two other council-controlled organisations (CCOs).

Business New Zealand chief executive Phil O'Reilly said the organisation welcomed the study into wages and living conditions, but wanted a broader focus than just wages.

Subsidising transport and childcare for low-wage workers were ways businesses could support their employees without hiking up wages, he said.

The living wage concept was fraught as living costs differed region to region and with individuals' circumstances.

"To just say it's about wages is not correct."

The living wage campaign is backed by 126 union, community and religious groups.

By the numbers

$4.7 million - forecast cost of wages and salaries paid by the Masterton District Council in 2012/13 financial year.

75 permanent employees.

$2.5 million annual payroll for South Wairarapa District Council.

49 full and part-time employees.

13 South Wairarapa District Council employees paid under the "living wage" of $18.40.