The Employment Relations Authority has ordered an employer to pay a $60,000 penalty after paying its employees less than the required minimum wage. The employer also failed to provide holiday pay and sick leave to its employees.

The Labour Inspector was sent to investigate the workplace after a complaint was made about the underpaying of employees. When the Inspector asked for records of the employees’ wage, holiday and sick leave payments, the employer provided a falsified version of the records, which accounted for less than half of the employees’ actual hours worked.

When the Inspector inquired about the difference between the real hours worked and what was in the records provided, the employer provided a different set of records which showed the actual number of hours worked and the real amount that was paid to the employees.

This record highlighted that the employees were receiving almost $5 less than the minimum wage per hour and that they were not being paid sick days, nor were they receiving holiday pay.

The Authority initially ordered the employer to pay over $40,000 to the employees for unpaid wages and holiday pay. The Authority then had to determine whether a penalty should be imposed on top of the payment of unpaid wages.

The Authority decided that a large penalty needed to be imposed, because the employer caused a significant loss of wages for the employees over the course of their employment, and because the employer intentionally tried to mislead the Inspector by providing fake wage records. As well as this, the Authority found that the employer attempted to place blame on their former accountant and that this showed that the employer did not take responsibility for their actions.

In order to avoid this significant penalty, the employer firstly should have understood the consequences of intentionally underpaying employees who have limited knowledge or experience in New Zealand employment. The employer should have also provided accurate wage and holiday pay records to the Inspector when they were requested.

If there is confusion around employee rights, it is wise to seek advice from a professional with experience in the area.