Employers are required to adhere to the new minimum wage rate that comes into effect today.

The new minimum wage increases by 50 cents to $9.50 per hour from today, giving minimum wage earners an extra $20 a week.

The $9.50 minimum wage rate was approved by the Cabinet in May this year following a review and report from the Minimum Wage Review Panel.

In a statement last night, the Ministry of Internal Affairs said “employers are required to ensure compliance with this new rate”.

“All employees previously earning below $9.50 per hour must now be paid $9.50 per hour starting from this date. Please make the necessary adjustments to your payroll systems to reflect this change,” the statement said.

The new minimum wage resulted from the annual review mandated by the Employment Relations Act 2012.

A five-member Minimum Wage Review Panel chaired by the Ministry of Internal Affairs and key sectors, the Ministry of Finance and Economic Management, Chamber of Commerce, Cook Islands Workers Association and the community representative conducted a comprehensive assessment of the current wage landscape in the Cook Islands.

The panel’s report has not been made available publicly.

Earlier, Eve Hayden, Chamber of Commerce vice chair, said the Chamber, as the employer representative on the Minimum Review Panel, was fully engaged in the review process and as a panel they all agreed with this increase.

Hayden said alongside the impact on the Government’s payroll, and the direct and indirect impact on the private sector, they also considered the increases in the cost of living that everyone has experienced.

“It is a real balancing act between all of these things, and we believe the result of an increase from $9.00 to $9.50 from 1 July 2024 was a result we could all live with.”

Cook Islands Workers Association’s Helen Maunga earlier said even though she was ok with the $9.50 minimum wage rate, they looked forward to a better increase in the future.

Maunga, who was also part of the 2024 Minimum Rate of Pay Review Panel, said they had requested for $12, but there was a disparity between $10 and $12.

Prime Minister and Finance Minister Mark Brown, announcing the budget in May, stated that a 50-cent hourly raise for government workers would translate to an additional $1.3 million in costs over the four-year period.

“For a worker on 35 hours per week, that is an additional $900 dollars a year,” Brown said.

“The increase of the minimum wage to $9.50 per hour has required an additional provision for Government’s spending on personnel, primarily in the Pa Enua.”