A motor inn and café in Lewis Pass has been ordered to pay $19,296 in penalties and arrears by the Employment Relations Authority (ERA) for failing to pay a worker minimum wage or holiday pay.
The employee started working and living on site at the Alpine Motor Inn & Café limited on 17 November 2014 and did not receive their first pay of $1289.39 until 1 March.
By the time the employee resigned on 22 March 2015 they had only been paid a total of $2541.03, with the 552 hours they had worked in the first three months going unrecognised by their employer.
The ERA ordered Alpine Motor Inn & Café limited to pay the employee $6836.02 in minimum wage and holiday pay arrears, as well as a $5000 penalty for taking advantage of a vulnerable migrant worker.
An additional $7500 in penalties was also imposed on the business for their failure to maintain records, or pay minimum wage.
While director Jerry Hohneck argued that the worker was a volunteer and not an employee during the three month period, the ERA said the evidence provided did not stack up.
The ERA said differing accounts provided by Mr Hohneck for why the employee was not entitled to be paid for their work suggested that he knew his actions were in breach of the Minimum Wage Act.
“This kind of deliberate failure to pay an employee wages for work carried out is exploitation, and this is very serious,” says Labour Inspectorate Regional Manager David Milne.
“We are aware there is an issue in some sectors where businesses are recruiting and treating people as volunteers, even though legally their work arrangements mean they are employees.
“Workers coming from overseas are less likely to be aware of their rights and entitlements than New Zealand workers.
“Attempts like this to avoid providing people working in New Zealand with minimum employment entitlements will not be tolerated.
“It’s unfair to employees and it disadvantages businesses which do comply with all their employment obligations.
“Anyone employed in New Zealand must be paid at least the minimum wage for their work - there is no excuse for failing to do so,” says Mr Milne.
Ministry of Business, Innovation and Employment encourages anyone in this situation, or who knows of anyone in this situation, to call its contact centre on 0800 20 90 20 where their concerns will be handled in a safe environment.