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Employers heavily fined after paying migrant worker $4 an hour.

UnderpaymentsAugust 25, 2016

The Employment Relations Authority (ERA) have heavily fined two Auckland pub and bottle shop companies after they were found to be paying a migrant worker as little as $4 an hour.

The two companies, Sharmas & Sons (2009) Limited and Sharmas & Sons Limited, have been ordered to pay a total of $42,000 in penalties and over $45,000 in wage arrears after an investigation by a Ministry of Business, Innovation and Employment labour inspector.

They were found to have been non-compliant with employment law by failing to pay their employee the minimum wage for hours worked. In addition, they did not have written employment agreements, nor did they keep accurate time and wage records.

This penalties imposed by the ERA took into consideration the period of time during 2012 and 2013 where the employers owned and operated four pubs in South Auckland and two Happy Liquor stores.

Labour Inspectorate Regional Manager – Counties Manukau, Loua Ward, states that this case highlights the possible consequences of not complying with minimum employment standards.

This penalty sends a strong message that New Zealand does not tolerate employers who breach employment law and employ vulnerable staff under the table. Employers who breach employment law could face penalties of up to $10,000 for individuals and $20,000 for companies,” Ms Ward states.

Below are some of the issues and considerations employers should be wary of, which contributed to the companies’ hefty fines.

  • $4,000 penalty each for failing to provide written employment agreements
  • $10,000 penalty each for failing to pay employees according to the minimum wage
  • $7,000 penalty each for failing to pay holiday pay

In this case, the lack of credibility of the employer, the confusion created by not having basic employment records, and the perceived disadvantage they imposed of the employee, all contributed towards the fines the companies now face.

If you would like to review your wage rates or check that you are meeting your employment obligations, call Employsure today on 0800 675 700. We can advise on all matters relating to minimum wage and employee entitlements.

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