Young people can be paid less than the adult minimum wage under a bill that has been passed by Parliament.
The Minimum Wage (Starting Out Wage) Amendment Bill passed its third reading by 61 votes to 60 on Thursday in the face of strong opposition from Labour and the Greens.
It means 16 and 17-year-olds can be paid a minimum $10.80 an hour during the first six months of a new job, 80 percent of the adult minimum of $13.50.
Those aged 18 and 19 can also be paid below the minimum wage if they have been on a benefit for six months or more and haven't completed six months of continuous work with any employer.
The starting out wage must be agreed by an employer and an employee.
Until now the $13.50 minimum wage has applied to all workers regardless of age.
The Government says it will improve the chances of young people finding work because employers aren't prepared to pay them the same rate as experienced adults.
Labour's Megan Woods says it's a "kick in the guts" for students struggling to pay tuition costs.
"National talks big on the importance of education yet its actions today shriek of a Government that doesn't listen or really care," she said.