Employees working in the public sector earning more than $100,000 will have their pay frozen for another three years, with any pay increases targeted mainly at those earning less than $60,000.
It comes after Covid-19 saw the Government asked public service agencies to have minimal or no pay increases for public servants until June this year.
Public Service Minister Chris Hipkins said now "that pay restraint will need to continue to be exercised across the public service for the next three years".
"The updated guidance will continue to mean no pay increases for those earning over $100,000 and senior leaders within the public service.
"Any increases will be targeted to lower-paid public servants, largely those earning below $60,000, who account for about 25 per cent of the public sector.
That’s angered their union which says they now can’t keep up with cost of living increases.
"We want to see those on lower wages be the focus of any increases in pay."
He said it is consistent with the three-year pay rise freeze on MPs.
Public Service Association officials said the workers they represent felt "betrayed".
Kerry Davies said members "did the hard work required to push Covid-19 out of this country".
"Government pay restrictions will be a tough pill to swallow for the border workers who keep us safe, and the many public servants who supported business owners and workers through lockdowns and their flow on effects.
"It’s unfair and it’s bad economics. Social workers and DOC rangers don’t put pay rises into offshore accounts. They spend it at local businesses and support our economy. Reduced consumer spending will help no one."
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