Hamilton City Council has become the first in the country to vote in favour of paying its staff what campaigners have called the living wage.
Councillors on Tuesday voted eight to five in favour of paying $18.40 an hour to staff currently earning less.
As a result, 80 workers will get a pay rise in the next two years at an estimated eventual cost of $168,000 a year.
Mayor Julie Hardaker and deputy mayor Gordon Chesterman were among those who voted for more time to investigate the impact of the move.
Mr Chesterman says it will affect ratepayers, and there could be a reduction in services.
However Councillor Dave Macpherson says the cost will come from the existing budget.
Mr Macpherson says the council has budgeted $1.7 million for salary increases. "I guess we're saying ... maybe ten percent of that should go to the people who are not even currently paid the minimum living wage."
It is not yet clear whether workers employed by council contractors will also get the higher wage.
The national convenor of Living Wage Movement Aotearoa, Annie Newman, says a living wage needs to be for all workers providing services for the council, not just those it directly employs.
She says contractors are often among the lowest-paid workers.
