Recent decisions of the Employment Relations Authority (ERA) indicate that the Labour Inspectorate is cracking down on workplaces to ensure that minimum employment standards are being met. The decisions also indicate that the penalties being imposed on offending employers are increasing.
A vineyard labour contractor was ordered to pay a $25,000.00 penalty by the ERA after a labour inspector found that it failed to keep employment records for a second time. The ERA also imposed an 18-month stand down period on the employer for recruiting migrant labour.1
An Auckland courier company was fined $63,621.02 for breaching the rights of 15 migrant workers. The breaches included failing to pay minimum wage, failing to provide written employment agreements, deducting wages without written consent, withholding wages for public holidays and failing to keep accurate employee wage, time, and holiday records. From the penalty imposed, $17,750.00 was required to be paid directly to the affected employees.2
A Northland petrol station was fined $28,500.00 for breaching its obligation to pay at least the minimum wage, failing to pay correct holiday pay and for making unlawful deductions.3
A labour hire company working on asparagus farms in the Waikato was ordered to pay $58,818.02 after being caught twice by the Labour Inspectorate for failing to retain employment agreements and for failing to keep wage or time records.4
A car company in Hamilton attempted to avoid minimum employment standards by simply calling their employees "contractors", and was penalised $65,000.00 as a result.5
This crackdown comes in the wake of changes that came into force on 1 April 2016 that further clarified employers' record-keeping requirements. Tougher sanctions were also introduced to help enforce compliance, such as imposing restrictions on offending employers from recruiting migrant workers. Currently, 25 employers are on a stand down period for breaches of employment legislation.
Employers are under scrutiny to ensure that they meet minimum employment standards.
In light of these decisions, employers need to ensure that:
- Each employee has a written employment agreement;
- Employees receive the correct holiday pay and leave entitlements and that these entitlements are accurately recorded;
- Employees receive, at least, the minimum wage;
- They can produce a record of the number of hours worked each day in a pay period by an employee and the pay for those hours; and
- Employees have access to all records, if requested.
1Labour Inspector v KRSVP Ltd and
Anor  NZERA Christchurch 93
2 Labour Inspector v D K Transport (2009) Ltd  NZERA Auckland 97
3 Labour Inspector v IXL Petroleum Gas Ltd  NZERA Auckland 128
4 A Labour Inspector, Ministry of Business Innovation and Employment v BBS Horticulture Limited  NZERA Auckland 172
5 Labour Inspector v Direct Auto Importers (NZ) Limited  NZERA Auckland 195
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