Do Employers Have To Pay For Employee Training In New Zealand?

If you’re running a small business, training is one of those “necessary but tricky” areas. You want your team to be capable, compliant and confident - but you also need to keep a close eye on costs and roster coverage.

That’s where questions about paying employees for training usually come up. Do you have to pay employees for training time? Do you have to pay course fees? What if training is after-hours? And can you ask an employee to repay training costs if they leave?

In New Zealand, there isn’t one simple “yes/no” rule for every training situation. Your obligations depend on whether the training is required, whether it counts as work, what the employment agreement says, and whether minimum employment standards are being met.

Below, we break down the practical rules and common pitfalls, so you can set your business up with clear, lawful training arrangements from day one.

Why Paying For Training Can Get Complicated For Small Businesses

Most disputes around training pay don’t happen because an employer is trying to do the wrong thing - they happen because training can sit in a grey zone between “work” and “professional development”.

From a small business perspective, training can include:

• Induction and onboarding
• Health and safety training (including site-specific procedures)
• Role-specific systems training (POS systems, booking platforms, machinery, internal processes)
• Compliance training (food safety, hygiene, licences/certifications relevant to the job)
• Upskilling (e.g. leadership courses, advanced technical qualifications)

The key issue is this: if training is effectively part of the job (or required for the job), it often needs to be treated like work. That can mean paying wages, counting hours toward overtime thresholds (if your agreement provides for it), and ensuring minimum wage compliance.

On top of that, the rules can be affected by what you’ve agreed to in writing - which is why getting your Employment Contract right (and keeping it consistent with your policies) matters.

When Does Training Count As “Work” (And Need To Be Paid)?

A useful way to think about training pay is to ask: is the employee attending because your business requires it, for your business purposes? If yes, you should assume it’s likely “work time” unless you have strong reasons otherwise.

1) Training Required By The Employer

If you direct an employee to attend training, or it’s a requirement of the role, then the safest approach is to treat those hours as paid work hours.

This commonly includes:

• Paid induction or onboarding shifts
• Mandatory refresher training (e.g. new procedures, new equipment)
• Training needed to meet operational or legal requirements of your business

Why? Because employees are giving their time to your business, under your direction, and it’s closely connected to the job they’re employed to do.

2) Training That’s Necessary For Health And Safety

Health and safety training often needs to be treated as part of paid work, particularly where it’s necessary to perform work safely.

Under the Health and Safety at Work Act 2015, you have duties to provide information, training, instruction or supervision that’s necessary to protect workers from risks. In practice, that obligation is hard to square with expecting staff to “volunteer” their time for required safety training.

If the training is needed to do the job safely, it’s generally best practice (and good risk management) to pay for that time.

3) Online Modules And “Quick” Training

Short online modules are a common pain point. Even if it’s 15 minutes at home, if you require it, you should usually treat it as time worked and make sure it’s recorded and paid.

The risk isn’t just disgruntled staff - it’s also compliance. Under the Minimum Wage Act 1983, employees must receive at least the minimum wage for all hours worked. If required training time isn’t recorded and paid, you can accidentally create a minimum wage breach.

4) Training Outside Normal Hours (After-Hours Or Weekends)

If training is required and happens outside normal hours, it can still be “work”. That means you may need to pay:

• Ordinary wages for the hours
• Any overtime or penal rates that apply under the employment agreement (if applicable)

This is where businesses get caught out - especially if you’re assuming “they’re salaried” or “it’s professional development”. Whether additional payments apply depends on the contract terms and the employee’s working arrangements (and for salaried employees, you still need to ensure their salary covers all hours worked at least to the minimum wage level).

It’s worth checking your approach against your wage and hours terms, and the practical guidance in our Working Overtime overview.

5) Voluntary Upskilling (Not Required For The Role)

If training is genuinely optional, not directed by you, and not necessary to perform the employee’s current job, you may have more flexibility.

But “optional” needs to be real. If an employee would reasonably feel pressured to attend (for example, because everyone is expected to do it to keep getting shifts), you should treat it cautiously.

A practical rule: if you benefit from it immediately as part of the employee doing their job for you, it’s safer to treat it as paid work time.

Do Employers Have To Pay For Course Fees, Travel Time, And Other Training Costs?

Training pay usually starts with “do we pay wages for the hours?”, but the next question is often: who pays the training costs?

New Zealand law doesn’t always force an employer to pay every training-related expense in every scenario - but you must be careful about how costs are handled so you don’t breach minimum standards or make unlawful deductions.

1) Course Fees And Provider Charges

If the training is required for the job (or required by you), it’s common - and usually sensible - for the business to pay course fees.

If you make the employee pay for mandatory training, you can run into issues such as:

• The employee’s effective hourly rate dropping below minimum wage once costs are factored in
• Disputes about whether the cost was truly optional
• Arguments that it’s an unreasonable requirement (particularly for lower-paid roles)

If the training is optional and primarily for the employee’s broader career development, it may be reasonable for the employee to contribute - but you should document the arrangement clearly.

2) Travel Time To Training

Whether travel time must be paid depends on the circumstances. Key factors can include:

• Where the training is held (usual workplace vs another location)
• Whether travel is during normal working hours
• Whether the travel is required by you and primarily for your business purposes

If you require an employee to travel to a training venue as part of their work obligations, travel time may need to be treated as work time - particularly where they’re travelling to an offsite location (rather than simply commuting to their normal place of work).

Even where travel time is not treated as paid work time in a particular situation, you should still consider travel-related expenses (like mileage, parking, public transport) and handle them consistently to avoid grievances and retention issues.

3) Training Materials, Uniforms, And Tools

Be cautious about shifting required costs onto staff. If you require employees to buy materials, tools, or specific items to complete mandatory training, it can create the same minimum wage and deduction risks.

If you want employees to purchase something, it should be genuinely optional - and you should still sanity-check the fairness of the arrangement (especially for junior employees).

4) “Time Off In Lieu” For Training

Some businesses try to manage costs by offering time off instead of paying wages for training hours.

Time off in lieu (TOIL) can be workable in some workplaces, but it’s not a “free pass” to avoid paying for time that counts as work. TOIL needs to be handled carefully, consistently, and in line with what the employment agreement allows (and you still need to ensure minimum wage and record-keeping compliance). If you want to explore that option, it helps to understand the usual pitfalls around Time Off In Lieu first.

In many cases, especially for mandatory training, the simplest and cleanest option is still: pay the hours as work.

Can You Require Employees To Repay Training Costs If They Leave?

This is one of the most common small business questions: “If we pay for training and they resign shortly after, can we recover the cost?”

Potentially, yes - but only if you do it properly.

In New Zealand, you generally cannot just deduct money from wages because an employee leaves. Deductions are regulated (including under the Wages Protection Act 1983), and the safest approach is to plan ahead with clear written terms and an agreed process.

Training Repayment Clauses (Sometimes Called “Bond” Arrangements)

Employers sometimes use repayment clauses that require an employee to repay some training costs if they leave within a set time period. These arrangements can be workable if they’re:

• Agreed in writing in advance (ideally in the employment agreement or a separate signed training agreement)
• Reasonable in amount and duration (for example, reducing over time rather than a flat “pay it all back”)
• Clear about what costs are covered (course fees, exam fees, and other genuine external costs)
• Not punitive (it should be cost recovery, not a penalty for resigning)

In practice, “training bonds” are very fact-specific. Whether they’re enforceable can depend on how the clause is drafted, what costs you’re trying to recover, whether the training was genuinely additional (rather than basic onboarding), and whether the arrangement is fair in the circumstances. If you want to include something like this, it’s worth getting advice first.

Wage Deductions Need Proper Consent

Even if you have a repayment clause, deductions from wages generally require the employee’s written consent (and the employee may be able to withdraw consent in some circumstances). A “we’ll just take it out of your final pay” approach can easily backfire.

Practically, if you’re considering training repayment arrangements, you should ensure your Employment Contract and internal policies are aligned, and that you’ve got a sensible paper trail showing informed agreement.

What If You Paid Wages For Training Time?

Be especially careful about trying to “claw back” wages paid for training hours. If the training was required and counts as work time, those wages are generally earned. Trying to reframe them as a recoverable “cost” can create risk.

If you do want a repayment arrangement, it’s usually cleaner to focus on genuine external costs (like course fees) rather than normal wages.

How To Set Clear Training Pay Rules (And Avoid Disputes)

The best time to deal with training pay is before you send someone to training.

When expectations are clear, you’re more likely to:

• Control costs
• Avoid inconsistent “case-by-case” decisions
• Reduce the risk of personal grievances and pay disputes
• Keep your team engaged (because they know you’re being fair)

1) Put Training Pay Terms In The Employment Agreement

Your employment agreement is the foundation document that sets pay, hours, and key expectations. If you’re regularly running training (especially after-hours or offsite), it’s worth building clear wording into the agreement.

At a minimum, consider covering:

• Whether training time is paid (and at what rate)
• How training hours are recorded
• Whether overtime applies to training time
• Whether the business covers course fees and related expenses
• Any repayment arrangement for external training costs (if applicable)

Having a properly drafted Employment Contract helps you avoid gaps that can cause issues later.

2) Back It Up With A Staff Handbook Or Workplace Policy

Your contract sets the legal relationship, but policies help you run the workplace consistently day-to-day.

A training policy might cover practical details like:

• Approval processes for external training
• What counts as mandatory vs optional training
• Expense reimbursement rules (receipts, mileage rates, timeframes)
• Study leave expectations (if you offer it)
• Repayment arrangements and how they reduce over time

This is often easiest to manage through a Staff Handbook and a tailored Workplace Policy framework that fits how your business actually operates.

3) Make Sure You’re Still Meeting Minimum Employment Standards

Even if an employee agrees to something, you generally can’t “contract out” of minimum standards.

When you’re making decisions about training pay, double-check:

• Minimum wage compliance (including the effect of any costs the employee must pay)
• Holiday and leave rules under the Holidays Act 2003 (e.g. if training happens during what would otherwise be time off, how is that handled?)
• Good faith obligations under the Employment Relations Act 2000 (clear communication and not springing changes on staff)

If you’re unsure, it’s usually cheaper to clarify things early than to fix a dispute later.

4) Treat Training Like Rostering (Not An Afterthought)

One of the simplest ways to avoid problems is to run training through the same lens as any other labour planning:

• Confirm whether the training is mandatory
• Schedule it into paid hours where possible
• Record time properly
• Confirm costs in writing before booking

Imagine this: you send a new hire to a “quick” training session on a Saturday, don’t pay them because it was “only two hours”, and then they mention it to another staff member. Suddenly you’ve got a morale issue - and a time/wages issue - that spreads well beyond the original two hours. Clear processes prevent that.

5) Get Advice If You’re Doing Something “Non-Standard”

Some arrangements are higher risk and worth getting checked before you roll them out across your team, including:

• Training repayment clauses
• Unpaid “trial” training shifts (these can be particularly risky)
• Regular after-hours training for hourly staff
• Complex salary arrangements where training time increases total hours worked

If you want to sanity-check your approach, having an Employment Lawyer review your documents and training processes can save you a lot of headaches down the track.

Key Takeaways

• If training is required by you or necessary for the employee to do their job, it’s usually safest to treat it as paid work time.
• Mandatory training time may need to be paid even if it’s short, completed online, or held outside normal rostered hours.
• Be careful about shifting training costs onto employees, especially where it could effectively drop their pay below minimum wage or create an unlawful deduction issue.
• Training repayment clauses can be possible, but they need to be clearly documented in advance, reasonable, and implemented with proper consent (especially if wage deductions are involved under the Wages Protection Act 1983).
• Your best protection is to document training pay rules properly in an Employment Contract and support it with a consistent policy or handbook.
• When in doubt, get tailored advice early - it’s usually far easier than trying to unwind a pay dispute later.

If you would like help reviewing your training pay approach, updating your workplace documents, or drafting tailored terms for training and repayment, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.