Minimum wage will rise to $20 an hour on April 1, 2021.

Workplace Relations and Safety Minister Michael Wood says as New Zealand looks to recover and rebuild from COVID-19, the Government is committed to supporting Kiwis by raising wages.

'There are many Kiwis who earn the minimum wage that have gone above and beyond in our fight against COVID.

"I think everyone agrees those who served us so well during lockdown – including supermarket workers, cleaners, and security guards – deserve a pay rise."

Wood says this minimum wage increase will lift the incomes of around 175,500 New Zealanders – which means $44 more each week before tax for Kiwis working 40 hours a week on the minimum wage.

'The rise in the minimum wage is estimated to boost wages across the economy by $216 million, giving New Zealanders more money to spend at local businesses. Increases to the minimum wage can also promote productivity, which is good for businesses too.

'We're taking a balanced approach and supporting both employees and employers through the pandemic.

"We'll be providing access to a Short Term Absence Payment to support employers to ensure their employees are able to follow public health guidance while waiting for a COVID-19 test. In the event of COVID-19 resurgence, we have put in place a new Resurgence Support Payment to help firms cover their fixed costs and committed to the Wage Subsidy Scheme for Alert Level 3 and above.

'Signalling the minimum wage increases over three years has helped give businesses much needed certainty. Next year I will outline what changes we are intending to make in the coming years to give businesses time to plan ahead."

The starting-out and training minimum wages will also rise to $16 per hour, to remain at 80 per cent of the adult minimum wage.