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The minimum wage is set to rise $1.20 an hour on April 1 to $18.90, the biggest lift ever.
Workplace Relations Minister Iain Lees-Galloway says it's the next step in the Government's plan for a $20 minimum wage by 2021 and will affect an estimated 242,000 workers.
He says New Zealand's economy has a solid footing with unemployment at 4.2 per cent and GDP is growing faster rate than other OECD nations.
The increase will boost wages by more than $300 million a year which will go into local economies where workers spend their wages.
E Tū union welcomed the increase but said the Government needs to do more to reform workplace conditions, including fair pay legislation to stop workers on low wages are exploited by the contracting model.
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