Minimum wage exemptions for disabled people

If you employ a person with a disability that significantly limits them in the job, an application can be made to the Labour Inspectorate for a minimum wage exemption permit. Permits will only be granted if they are reasonable, the employee agrees, and you have done all you can to help the employee do all parts of their job.

How a minimum wage exemption permit works

Under the Minimum Wage Act 1983, in certain circumstances, Labour Inspectorate can issue a minimum wage exemption for a person with disabilities.

You can only apply for a minimum wage exemption permit for an employee who has a disability that significantly limits them from carrying out the requirements of their work. The permit means that the person named in the permit can be paid a lower minimum wage rate, which is reasonable and fair for the activities they are able to undertake for:

  • the specific job named, and
  • the period of time stated in the permit.

Hiring disabled people

The Labour Inspector will only grant the exemption if:

  • it is reasonable and appropriate
  • any reasonable actions that could help the employee carry out the work have been considered
  • they think the wage offered is fair, and
  • the employee agrees with the offered rate of pay.

If the employee is a member, the union will need to agree to the employee being paid at a different rate than the pay rate in the collective agreement.

Good faith

Collective and individual agreements

How to apply for an exemption

If you’re thinking of offering a job to an employee with a disability and believe it is fair and appropriate to pay them less than the minimum wage, contact our Service Centre.

Contact us

Where required the service centre can forward a minimum wage enquiry to the Labour Inspectorate for further action.

Showing that the wage is fair

You will need to show why the wage you’re proposing is fair and reasonable. It may be helpful to use a wage assessment tool to estimate the employee’s job performance.

Before approving the negotiated wage rate, the Labour Inspector must confirm that:

  • the employee agrees with the rate
  • the employee’s disability stops them from earning the minimum wage for the work they do
  • the wage rate relates to the employee’s ability to do the work
  • the employee has been given the opportunity to have an independent representative, support person or advocate with them when discussing the wage rate
  • the work is suitable for the employee, and they will be appropriately supervised and get the right training and support from their employer
  • you are offering the employee an employment agreement that meets all other minimum employment rights – for example, the right amount of leave and breaks
  • the wage rate is consistent with the wages of other people in similar circumstances who have minimum wage exemptions to do similar work
  • you had done everything that can reasonably be expected to be done to help the employee do the job to the best of their ability.

Performance management, training and development

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