Last year, the Labour Inspectorate undertook a series of investigations and found that volunteers and WWOOFers (the popular scheme where travellers work in exchange for food and lodging), were, in fact, employees. At the time we published some advice, which has recently been confirmed in an Employment Relations Authority (ERA) determination.
In December last year, the ERA released its decision of Labour Inspector v Karamea Holiday Homes Ltd.
The respondent operated a farm and associated firewood and gardening business. It relied heavily on 'volunteer' workers, and specifically advertised for them. The company maintained that the workers were 'WWOOFers', and therefore volunteers.
These so-called volunteer workers were required to work 40 hours per week and were hired out to clients to undertake labouring jobs. They were paid $120 per week, which was to be spent refuelling a farm vehicle the workers used, plus they were supplied with food and accommodation. Strict hours and days of work were prescribed.
The ERA had no trouble finding that the workers were actually employees.
The respondent was ordered to top up the employees' wages to meet the minimum threshold. It was also required to pay holiday pay and other minimum entitlements. Finally, the company was also required to pay interest on the outstanding figures. The issue of penalties and costs was reserved to be determined at a later date
How does the ERA or Court determine the status of a worker?
When the ERA or Employment Court assess the legal status of an employment relationship, it "must determine the real nature of the relationship... by considering all relevant matters".
The name given to an employment relationship will not necessarily be determinative of the relationship in law. Therefore, an agreement between an employer and the worker, that he or she is a volunteer, will not be enough on its own.
The ERA or Court will undertake a holistic assessment of that relationship to find its real nature. Factors that will be considered include:
- Is the worker is paid or rewarded for their work?
- Does the worker expect to be paid for their work?
- Does the business make an economic gain from the work?
- Is the work is integral to the business?
- Are the worker's hours controlled?
Despite the fairly widespread WWOOFer movement in New Zealand, there is no immigration category that allows work in exchange for accommodation and food. Regardless, we see a lot of visitor and working holidaymakers using the WWOOFers scheme.
For example, visitors are meant to spend their time touring or visiting friends or family. They are prohibited from engaging in productive work, which includes any activity that is being undertaken for any gain or reward, such as board and lodging. As a result, a visitor engaging in WWOOFing is working in breach of his or her visa. This may impact on his or her ability to stay in New Zealand or return in future.
Working holidaymakers to New Zealand may undertake any employment, except permanent employment or, of course, work in the sex industry. If a working holidaymaker is WWOOFing, and the true nature of the relationship is that he or she is an employee, then he or she must be paid properly, under the law. This means receiving minimum wage and other entitlements.
Finally, if your WWOOFER is really an employee and you don't pay him or her as such, or fail to provide minimum entitlements (such as sick or annual leave) you will be in breach of employment law. This is likely to result in an infringement notice from the Labour Inspectorate, which in turn, could see you added to the non-compliant employer list. If you are on this list you will be unable to support a migrant worker with a visa application for at least six months.
It is very important to know whether your workers are truly volunteers (WWOOFERs) or workers. It is often unclear, and the situation can change over time.
If you have any uncertainty about the status of your workers or would like advice on your employment and immigration law obligations, the Employment and Immigration teams at Cavell Leitch are happy to assist.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.