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Labour Inspectors hitting hard on Minimum Entitlements

Minimum entitlements are a long-established feature of the employment landscape in New Zealand and cannot be unknown to employers. Although calculating and paying bereavement, alternative days, public holidays and sick leave sounds simple enough, it is actually quite easy to get wrong – as has been demonstrated in multiple Authority and Employment Court cases. Below are a few recent cases of note:

Last year the ERA ordered a Dunedin based bakery owner to pay $299k in arrears and penalties of minimum wage, annual and public holiday entitlements and sick leave.

A Labour Inspector investigation found that the employer failed to pay employees their correct wages, holiday and sick leave pay, in breach of the provisions of the Employment Relations Act 2000, the Minimum Wage Act 1983, and the Holidays Act 2003.

In this case, the workers were paid wages for 40 hours per week when, in reality, they were working around 80 hours per week. As a consequence, the total remuneration paid to the employees equated to less than the minimum wage rate when worked out across the total hours. There were also no timesheets or records kept, and one employee had been asked to provide ‘false information’ to the Labour Inspector.

Similarly, in a case, A Labour Inspector v Olive & Jenn Co Limited, the employer failed to properly pay annual leave, time and a half, provide alternative holidays, properly pay unworked public holidays, and maintain holiday and leave & wage record for two employees.

An improvement notice was served, and when a follow up investigation was commenced years later, a majority of these payments had still not been paid correctly or accurately recorded. The employer was ordered to pay $40,000 and the owners personally were each to pay $20,000 to MBIE.

If there is one message that cases such as these send, it is that businesses who exploit their workers and fail to uphold their obligations will be handed severe penalties by the employment jurisdiction.

While these two cases are of particular note due to the fines awarded, it is important to note that it’s not just those types of employers who face penalties. Any employer who fails to keep accurate records and calculations could face significant penalties, whether there is good faith intended or not.

The Holidays Act is due to change and Labour Inspectors are hitting hard, so now is a great time to get ahead and make sure all of your record keeping is accurate and up to date.

We have a team of experts in minimum entitlements legislation who will undertake a comprehensive comparison between what you do in practice and the requirements of legislation, caselaw, contractual entitlements provided for in the employment agreement and the agreed hours of work and the actual hours of work.

If this is something you want to get on top of, be sure to get in touch with one of our associates today.

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

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