Employer ordered to pay large penalties and compensation for breaching employee rights…

The Employment Relations Authority has ordered an employer to pay $60,000 after it found that it had breached the rights of a number of employees. One of the employees filed a complaint to the labour inspectorate, who found several employment law breaches by the employer.

To secure his employment one employee was made to pay $16,000 to the employer as a “loan”. This is a breach of the employee’s rights, as it is against the law for an employer to receive payment from an employee in return for employment status.

In addition, the employers were found to be paying employees $21 per hour, which was the threshold to meet visa requirements at the time. The employer would then make the employees pay back a portion of their pay, in an attempt to minimise spending on wages.

This effectively meant that the employers were tricking Immigration NZ into allowing their employees to work whilst making less than the required amount.

Finally, the employer admitted that they had breached their minimum wage duties, as well as their duty to give their employees holiday pay. It was found that the employer owed over $26,400 to its employees.

In making its decision the Authority referred to the employer’s actions as an example of, “…an employer exploiting the inequality in an employment relationship”.

The Authority ordered the company that employed the workers to pay $40,000, and each owner of the company to pay $20,000, as a penalty for their illegal actions. The employer was also made to pay $26,400 as compensation for the wages withheld from its employees.

Getting the employment process wrong can be costly.