The Employment Relations Authority has ordered an employer to pay over $15,000 in wage arrears to an employee after failing to correctly record the amount of time that he worked, leading to the underpayment of wages.

The employee signed an individual employment agreement with the employer, which stated that he was to work 45 hours per week at a rate of $16.50 per hour, with over-time required.

After discussions with Immigration NZ, the employee’s rate of pay was increased to $18.50 per hour to reflect market rates and policy guidelines. The employer agreed, but this change was never reflected in the employee’s pay.

During his employment, the employee worked an average of 80 hours a week. The employer failed to pay the employee for the extra hours he worked, and eventually offered the employee a salary as they were unable to pay all of his over-time. The new employment agreement resulted in the employee receiving a rate of $12.47 per hour.

The employee had little bargaining power and signed the employment agreement on the basis that he would be paid a $10,000 bonus for the extra hours he worked.

The employee eventually resigned as a result of not being paid his overtime, and subsequently raised an arrears claim with the Authority to recover the unpaid wages.

The Authority accepted that the employer had failed to pay the employee for his hours worked, and failed to keep wage, time, leave and holiday records. Under the Employment Relations Act and the Holidays Act, all employers are required to keep full and accurate records of wages, time and leave. The failure to do so in this situation was a breach of the required standard of employment.

The Authority ordered the employer to pay over $15,000 plus interest in wage arrears.

There are important processes which an employer must implement during the course of employment to ensure that they are operating in accordance with the required standard of employment. If you are confused about these requirements, it pays to seek advice from a professional with experience in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Author

Alan Knowsley and Hunter Flanagan-Connors