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Lower Hutt construction company to pay $42,000 for unlawful wage deductions

Tiger Construction NZ Limited has been ordered to pay $21,000 for making unlawful deductions from employees’ wages and a further $21,692 as reimbursement for the deductions to three migrant employees.

The Employment Relations Authority (ERA) ordered the company to pay the penalties. The company trades as Tiger Scaffolding in Lower Hutt, providing residential and commercial scaffolding.

The Labour Inspectorate, part of the Ministry of Business, Innovation and Employment (MBIE) investigated Tiger Construction after receiving complaints from the Philippines Embassy on behalf of three workers alleging deductions were made from their wages without their knowledge. The investigation showed the employer made a number of deductions related to workers’ accommodation and also for training which they never attended. 

Labour Inspectorate construction sector strategy lead Jeanie Borsboom says that while employers can make deductions from employees’ wages in certain cases, these deductions must be reasonable and must be agreed to by the employee. 

“Employers must consult employees before making a deduction from their wages. It’s not enough to have a deductions clause in the employment agreement. Even then, the deductions must be reasonable. For example, employers cannot charge employees for operational costs that should be covered by the business. 

“Employees who didn’t agree to deductions or were pressured into agreeing can take a case to the ERA for as far back as six years.” 

The ERA found these deductions were unlawful and unreasonable. The employer failed to engage with the Labour Inspectorate stating they had other things to do and did not participate in the ERA’s process. The employer has also been listed on the Immigration Stand-down list, preventing them from hiring new migrant workers. 

“The workers have done the right thing in going to the Philippines Embassy. Migrants are entitled to the same rights as New Zealand workers and the Inspectorate works closely with the embassy to ensure Filipino workers have access to information about their rights and are treated fairly in the workplace,” Ms Borsboom says. 

The Labour Inspectorate encourages anyone concerned about their employment situation or the situation of someone they know, to phone the Ministry’s service centre on 0800 20 90 20 where concerns are handled in a safe environment. 

Find out more about making deductions from pay.

Deductions

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