The Government has announced it is raising the minimum wage to $14.25 an hour.
The current adult minimum wage is $13.75.
The Starting-Out and training minimum wages will increase from $11 an hour to $11.40, which is 80 percent of the adult minimum wage.
Prime Minister John Key says the increase will keep the minimum wage at about 50 percent of the average hourly rate.
"We've raised the minimum wage every year that we've been in office. But we know there is a balance between raising the minimum wage and making sure we don't put businesses or jobs at risk or create a disincentive for firms to hire new employees.
"Today's announcement strikes the right balance."
The Council of Trade Unions says the increase is not enough, given there has been several years of stagnating wages, an economy that's starting to grow and widespread concerns about how that growth will be shared.
The new minimum wage rates will come into effect on 1 April this year.