An initiative to pay disabled people the minimum wage has had mixed reactions from the community, with concerns businesses will continue to exploit cheap labour
The Government will spend about $30 million subsidising businesses who employ disabled people under the Minimum Wage Exemption.
Labour Inspectors may issue minimum wage exemption permits to employees who have a disability that limits them carrying out the requirements of their work. READ MORE: * A call to address NZ’s discrimination blind spot * The Detail: Barriers everywhere for disabled people
Yesterday's Budget set aside $30 million in operating funds and $10 million in capital to top up workers who are being paid less than the minimum wage.
Disability Issues Minister Priyanca Radhakrishnan described the practice as “unfair”.
“This unfair exemption currently affects about 800 disabled people who are legally able to be paid less on the basis they’re perceived to be less productive.
“We will end this work immediately.”
Approximately 800 workers from mid-2025 will have their wages topped up by the Government so they take home the minimum wage – but their employer does not pay it.
Workbridge chief executive Jonathan Mosen hoped the subsidy would have a sunset clause on it.
“It’s a complicated one because you don’t want to deprive people from work and the purpose that work brings.
“I’d be broadly sympathetic if it was a transition payment and disappointed if it was permanent.”
“It is disappointing... the state shouldn’t have to be backing up companies that are failing to provide minimum wage to their disabled staff." - Dr Huhana Hickey
He said Workbridge only worked with employers that paid at least the minimum wage.
“My position is if you can’t run a profitable business, you shouldn’t be running it. Don’t rely on cheap labour.
“It sends the signal that there’s a class of New Zealander that are not worthy of the same legal protections as everyone else, it’s problematic.”
Lawyer and disability advocate Dr Huhana Hickey said the fact disabled people would get paid more was good news, but agreed it should not be long-term.
“It is disappointing... the state shouldn’t have to be backing up companies that are failing to provide minimum wage to their disabled staff.
“I hope it’s just a stop gap ... it won’t be sustainable long-term.”
Hickey described the practice as “slave labour”.
“It was designed to get war veterans rehabilitation and back into working by underpaying and giving them training allowances. Then it got expanded to disabled and has artificially kept them in sheltered employment.”
The Budget also delivered $863.6m toward disability support services.
This includes greater demand for individualised funding, off the back of inflation.
Half price fares for the Total Mobility scheme was also made permanent.
In education, $147m for modifications in schools was set aside to make them more accessible.
$240m was also allocated for the Training Incentive allowance which helps sole parents, disabled people and carers to study.
Hickey said overall it was a good Budget for disabled people.
“This is the first budget where I've actually seen some real targeting of something that's really going to make a difference and I'm quite encouraged."
However, she said there were gaps around funding for addressing housing accessibility and public transport.
“There's still a big issue there, I mean, in Auckland it's chaotic. But disabled also need to be able to travel between towns, they need to be able to go other than through planes and there is no other way of being able to get from A to B – buses need to be accessible.”
