Business owners to personally pay for breaching employment standards

Two Employment Relations Authority (ERA) determinations have sent a strong message that both businesses and owners can be significantly penalised for breaching multiple employment standards.

The ERA has ordered Napier restaurant Golden Spring Takeaway, owned by Huichan Xu as a sole trader, to pay $30,000 for breaching minimum employment standards for two migrant employees.

“The Labour Inspectorate investigation found that Golden Spring Takeaway breached 10 standards including failing to retain copies of the individual employment agreements, failing to keep a wage and time records, and failing to keep holiday and leave records as required by law,” says Labour Inspectorate National Manager Stu Lumsden.  

“The employees worked long hours, seven days a week with no days off for a period of over six months.

“Initially Ms Xu denied that the pair were employed by her and also providing the Inspectorate with manufactured records developed once the investigation had begun.

 “This is a reminder that migrant workers are a particularly vulnerable section of the workforce, as they’re less likely to be aware of their rights and entitlements and can be concerned regarding their visa status.

A second determination penalised an Auckland flooring company for a similar amount for breaching all minimum employment standards.

Modern Floor and Wall Limited and its owner Mr Srinivas Panuganti each received fines for breaches against two employees.

The $25,000 total penalties were spilt between the company, fined $15,000, and its sole director who has been ordered to pay $10,000 out of his own pocket.

 “The Inspectorate found that the company and Mr Panuganti failed to meet minimum employment standards by not providing the employees minimum wage, maintaining holiday and leaving records or paying holiday pay.

“The penalties covered the employees being asked to pay a ‘premium’ to the director to retain their employment – basically having to pay to have their job,” says Mr Lumsden.

“Businesses should not be making profit at the expense of their employees. It is good to see the ERA is holding not only companies but directors personally culpable for penalties.

“Every employer needs to keep wage, time, holiday and leave records to ensure they meet all minimum standards, and where these are not in place the Inspectorate can and will impose fines.”

MBIE encourages anyone who has information about minimum standards not being met to phone the Ministry’s service centre on 0800 20 90 20, where all concerns will be handled in a safe environment.