The Real Cost to Businesses of Breaching Minimum Employment Requirements

Three recent decisions of the Employment Relations Authority have emphasised the importance of employers complying with minimum employment requirements – and the significant penalties employers can face by failing to do so.

Silviculture Solutions Limited decision – failure to pay minimum wage

Silviculture Solutions Limited, a large forestry company which employs up to 250 staff has been ordered to pay $35,000 after failing to pay its workers minimum wage. As a result of this penalty the company has been placed on the Immigration Employer Stand-down List preventing it from employing migrant workers for 18 months. It is noteworthy that approximately half the company’s workforce normally comprises of migrant workers.

The Employment Relations Authority held that the company used an “illegal system of calculating pay” because it only paid employees for their “productive hours” – being the time that the company expected the work to take – not the actual hours worked by the employees. In addition the company failed to pay workers for their attendance at safety meetings, or time spent preparing equipment and travelling to various work sites in the forest.

Golden Spring Takeaway decision and Modern Floor and Wall Limited decision – various breaches

Napier based restaurant Golden Spring Takeaway has been ordered to pay $30,000 for breaching a number of minimum requirements including failing to keep wage, time, holiday and leave records and failing to keep copies of employment agreements for its staff. Likewise the Auckland based flooring company Modern Floor and Wall Limited and its director have been fined a total of $25,000 for failing to pay the minimum wage and holiday pay and failing to keep holiday and leave records.

What you can do to protect your business?

The Employment Relations Authority is sending a firm message that breaches of minimum employment standards will not be tolerated. It is vital that employers understand their minimum employment requirements and apply them correctly to avoid penalties and being placed on the Immigration Employer Stand-down List. Both actions can have a significant impact on the bottom line and reputation of a business.

If you are unsure whether you are complying fully with minimum employment requirements Pitt & Moore Lawyers can help by completing an employment compliance health check for your business.

Talk to us

If you have any queries in respect of minimum employment standards, or any other employment law issues, please contact our Employment Team.