Employer ordered to pay over $188,000 after major breaches of employment standards …

Following a complaint by an employee to the Labour Inspectorate, an employer has been ordered to pay over $103,000.00 to an employee for unpaid minimum wages and other entitlements.

The evidence before the Employment Relations Authority (ERA) was that, at times, the employee worked 92 hours per week but was not paid at the minimum wage rate prescribed by New Zealand law.

When the employee complained about the long hours, the employer told him that he could not afford to employ other staff. The employer said that the employee could leave and have his visa cancelled or the employee could pay staff to work in his place out of what he was paid.

The employer did not keep accurate wage and time records, nor was a holiday or leave record kept. The employer produced a reconstructed record shortly before the hearing, however, the ERA found that the record was not reliable. The ERA instead relied on other records which were made at the time, such as a food diary kept by the employee and WhatsApp messages between the parties.

The employer was ordered to pay the following:

• $81,565.50 for minimum wage arrears;
• $21,448.10 for arrears of other minimum entitlements such as annual leave; and
• Interest.

The employer was ordered to pay a penalty of $61,600.00 for breaches of employment standards. In addition, the Director of the company and her husband were ordered to pay $12,000.00 each for being party to the breaches of the employment standards. While the husband was not a director, he was a person who exercised significant influence over the management and administration of the company and was able to be penalised under the Employment Relations Act.

In total, the ERA ordered payment of $188,500.00. This shows that not only must employers ensure compliance with minimum employment entitlements such as the rate of minimum wage and annual leave entitlement, but employers must also keep accurate wage, time and leave records.

Note the current minimum wage is $16.50 per hour, however, that rate is set to increase to $17.70 on 1 April 2019.

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