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Unpaid Work Trials Potentially Breaching Minimum Entitlements

Posted on: Sep 17, 2014

Unpaid trial periods are a potentially serious breach of minimum employment standards, Inspectorate warns.

12 September 2014

Maruia Springs Thermal Resort Limited has agreed to pay wages to employees it did not pay during work trials, following an investigation by the Ministry of Business, Innovation and Employment’s Labour Inspectorate.

The investigation uncovered that the resort required its employees to participate in non-paid “familiarisation periods”.

Steve Watson, Southern Regional Manager of the Labour Inspectorate says it is unlawful to employ workers on the basis of an unpaid trial period. Following its investigation, the Labour Inspectorate issued an Improvement Notice which the resort objected to and the matter was put before the Employment Relations Authority.

As a result of mediation, the resort acknowledged that the non-paid familiarisation periods amounted to an unpaid trial work period, which was in breach of the requirements of the Minimum Wages Act 1983. It agreed to pay wages to those affected.

“Unpaid trial periods are a potentially serious breach of minimum employment standards,” says Steve Watson.

“Business owners must ensure they are complying with employment law. Those that do not will be subject to enforcement action, which can include penalties of up to $10,000 for individuals and $20,000 for companies.

“The Labour Inspectorate is pleased that the resort will be paying wages to the employees affected by the unpaid trial work periods and that they acknowledge that such practices are unlawful,” Steve Watson said.

 

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.

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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