Compliance Guidelines for New Zealand Dairy Farmers (Part 1)

screenshot.102Over the next two months Agrismart will focus on Dairy Farm Compliance from the team recording their time to measuring the various leave entitlements all the way through to Health and Safety.

Our first subject is Salaried Staff and the minimum hourly rate.

Salaried Staff can be measured against the minimum hourly rate on a weekly or Fortnightly basis only. Generally speaking paying staff on a fortnightly basis is the best option and here is why.

If you pay the team on a weekly basis then they can only be measured on a weekly basis, however if you pay period comes around on a fortnightly basis the team can be measured against the minimum hourly rate on a fortnightly basis.

If you pay the team on a fortnightly basis then generally there will be at least one rostered day off (RDO) in that pay period. This means that staff will be less likely to fall below the minimum hourly rate.

For example on a 12/2 or 11/3 roster, fortnightly paid staff will always have either 2 or 3 days off per pay period. If they had been paid on a weekly basis whilst on a 12/2 or 11/3 roster then every alternate week will have no Rostered Days Off. (RDO’s)

Example:

Bill receives a salary of $52000 (Total Package Value- which includes on farm accommodation) He is measured the minimum hourly rate on $52000 (TPV)

If Bill is paid weekly his Gross Salary is $1000. At the minimum hourly rate ($15.75/ hr) he can work a total of 63.49 hours (9.07 hours x 7 days) before his hourly rate falls below the minimum hourly rate.

Paid on a weekly basis on a 12/2 or 11/3 roster Bill will have RDO’s one week and no RDO’s the next.  So he will be working 7 days one pay period and 4 or 5 days the next depending on whether his roster is 12/2 or 11/3. Based on his salary of $52000 Bill can work 63.49 hours per week before he breaches the minimum hourly rate so the week he works 7 days straight he can work a maximum of 9.07 hours average per day. On alternate weeks because he has 2 or 3 RDO’s the maximum number of hours he can work per day for this pay period on a 12/2 will be 12.69 hrs or, alternatively, on an 11/3 Roster he will work 4 days every alternate pay period at a maximum of 15.87 hrs/ day before he breaches the minimum hourly rate.

If Bill is paid fortnightly his Gross Salary will be $2000 and at the minimum hourly rate he can work a total of 126.98 hours.  Because he is paid fortnightly he will have either 2 or 3 RDO’s in each pay period meaning he can work an average of 126.98 hours over either 12 days on a 12/2 or 11 Days on an 11/3.

On a 12/2 Bill can work on average 10.58 hours every day he is at work before he breaches the minimum hourly rate.

On an 11/3 Bill can work 11.54 hours every day he is at work before he breaches minimum wage.

So keep in mind that a fortnightly pay period is the best pay period to adopt for all roster scenarios apart from those rosters that have RDO’s each week such as 5/2 or a 6/1.

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