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Migrant’s visa application declined after charging employment premium

An employer has repaid a $16,900 premium it and one of its employees received to help an employee with their visa, with a further $6,000 penalty ordered by the Employment Relations Authority (ERA).

“Charging premiums takes advantage of vulnerable employees who may feel like they don’t have any other option but to source large sums of money to keep a job. This is a clear breach of New Zealand employment law and will not be tolerated,” says Labour Inspectorate Regional Manager David Milne.

The employer, who operated a ‘Coffee Club’ café business in Parnell Auckland, and the café’s head chef and supervisor Shijie Lu, were paid the premiums by a Chinese national employed at the café.

The employee came to an agreement with Mr Lu that in return for payment, the company would support their application for permanent residence in New Zealand.  They were then offered an employment agreement and began working at the café.

Following these discussions, family members of the employee made two payments totalling $16,900 into Mr Lu’s personal bank account, some of which was used to pay rent for the café business.

Prior to making an application for residence, the employee resigned and requested a refund of the payments.

Ms Yingting Hou, the company’s director, said she was not aware of the agreement between the employee and Mr Lu, only becoming aware of the premium at some point after it had been paid.

After an investigation by a Labour Inspector, Ms Hou and Mr Lu expressed remorse for their mistake and the $16,900 was paid back. 

The Labour Inspector then sought a penalty against the employer, Vesta International Limited, in the ERA.

Following the employer’s acknowledgement it had breached the Wages Protection Act 1983, it was ordered to pay a $6,000 penalty to the Crown.

Mr Lu’s application to extend his work visa was declined by Immigration New Zealand for attempting to make financial gain through deceit by trying to obtain a premium in breach of the Wages Protection Act 1983.

The ‘Coffee Club’ in Parnell has since been sold to new operators.

You can read the full ERA decision online. (external link)

The Ministry 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.