Fulltime workers on the minimum wage will have $10 more a week before tax as a result of an increase announced by the Government on Tuesday.
The minimum wage will rise by 25 cents an hour to $13.75 from April this year. In 2012, the wage rose from $13 to $13.50 an hour.
The training and new entrants' minimum wage will also increase by 20 cents to $11 an hour in April, which is 80% of the adult minimum wage.
Labour Minister Simon Bridges says the Government had to strike a balance for workers and employers.
"I think we're been pro-jobs. I think what we're doing is we're protecting low-paid workers. We are bringing the wage up, which is what we've done year-on-year.
"But we're also being very clear: we don't want to put people out of work, we want to protect jobs and this is about that balance as well."
But John Ryall, national secretary for the Service and Food Workers Union, says the 25 cent increase an insult and demoralising.
"It's an insult to hard-working New Zealanders and it's a disgrace. This Government's living in a bubble - it's blind to the suffering of workers and their families on very low pay."
The Council of Trade Unions and the Unite union say the minimum wage should at the very least be $15 an hour.
The Labour and Green Parties also say a more substantial increase is needed for workers on the minimum wage.