Employer ordered to pay $38,000 after failing to meet the minimum employment standards…

The Employment Relations Authority has ordered an employer to pay $38,000 after deciding that she had contributed to a failure meet the minimum wage requirement of $20 per hour at the time. This is because the employees often worked 80 hours per week, but were only paid for 40 hours per week as stated in their contract. This brought the wages paid to the employees below minimum wage.

The initial proceeding was brought against a different employer, who was found to have breached the minimum employment standards and was subsequently ordered to pay a large penalty of his own. The question before the Authority in this case was whether another operator of the business contributed to the breach of minimum employment standards and if they too should be penalised.

To determine whether this breach had occurred, the Authority had to decide whether the employer had knowledge of the essential facts that the breach was occurring, or a wilful blindness in relation to those facts. This is the accepted standard to determine whether somebody is involved in a breach.

The Authority decided that the employer had actual knowledge of many of the essential facts in relation to the breach. Firstly, the employer had shown knowledge of specific terms and conditions contained in the employment agreements. They also had many details regarding the operation of the business, and were thoroughly involved in the day to day operation of the business, including employee compensation. As well as this, the employer had lied to the labour inspector about the number of hours worked by an employee, showing actual knowledge of wrongdoing.

These facts, coupled with evidence that the employer was solely responsible in the deployment of hours for the employees’ were sufficient to show that the employer had knowledge of the breach, and therefore was deemed to have contributed to it.

The employer was ordered to pay $38,000 as a penalty for her involvement in the breach of minimum employment standards.

If there is confusion around employee entitlements, it is wise to seek advice from a professional with experience in the area.

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Alan Knowsley and Matthew Binnie