A large-scale integrated operation led by regulatory teams from the Ministry of Business, Innovation and Employment (MBIE) has seen visits to 147 construction businesses targeting unlawful activity and serious non-compliance in the sector.
Operation Rimu involved teams from MBIE’s Labour Inspectorate and Immigration Compliance and Investigations with Tenancy Services and the Companies Office on standby. Site visits were undertaken at construction sector businesses in Auckland and across the North Island last week to check compliance with employment, immigration, company and tenancy laws.
Areas visited included Napier, Morrinsville, Pōkeno, Wellington, Tauranga, New Plymouth, Hamilton and all parts of the Auckland metro area.
Early findings were that there was evidence at several companies of breaches of minimum employment standards, cash wage payments and poor record keeping.
Simon Humphries, Head of the Labour Inspectorate, said several construction company directors reported being aware of cash‑wage and other unlawful practices in the sector.
“They said there were whispers in the industry, particularly in Auckland residential construction, about instances of businesses being significantly undercut to a degree that raised suspicions about the legitimacy of competing contracts.”
Mr Humphries said the various teams also found examples of robust employment practices that met industry standards, and positive engagement with education as well.
“All enforcement options will be considered and if applicable used to ensure minimum employment standards are met,” said Simon Humphries, Head of the Labour Inspectorate.
High risk area
“A strong and thriving construction sector is vital for New Zealand’s economic growth and productivity. However, it continues to be a high-risk area for non-compliance with industry regulations including worker exploitation, with 516 complaints made to Employment New Zealand about the construction sector in 2025, 56% of those in the Auckland region.
“Working with our regulatory partners, we know organised crime groups are exploiting weaknesses in the sector to launder money and exploit workers, setting up businesses in ways that undercut those operating legally and tilting the playing field against good, lawful business.
“Operation Rimu is part of an ongoing collaborative focus on the construction sector, with MBIE regulators and partners including New Zealand Police working together to address serious criminal activity and non-compliance.
“The operation reflects MBIE’s increased emphasis on integration, bringing together teams from across its regulatory system and working with partner agencies, to provide a more coordinated response to harmful behaviour in key business sectors and ensuring New Zealand’s markets are fair and lawful.”
Money laundering
Detective Superintendent Greg Williams, New Zealand Police’s Director of the National Organised Crime Group said: “New Zealand Police has identified labour hire practices in the construction sector as a high-risk area for money laundering and worker exploitation.
“Working with MBIE regulators and other partners, we can gain a wider view of unlawful activity, better identify offending trends and weaknesses in the system, and take action much faster.
“A key part of our approach also involves working with the industry to strengthen their processes and help put a stop to exploitation in the system. This collaborative approach means we will ultimately make a much bigger impact against organised criminal activity and serious non-compliance.”
Improved information sharing is a key component of Operation Rimu and its integrated approach. Earlier phases of the operation involved desk-based audits of scores of other construction companies carried out by the Labour Inspectorate. Information gathered as part of this work is supporting other MBIE regulators and partners with ongoing investigations and compliance activity.
The site visits last week involved Labour Inspectorate and Immigration teams checking potential employment and immigration issues. Immigration staff continue to play a supporting role in this operation, including ensuring Accredited Employers are meeting their employer obligations and that workers are sticking to their visa conditions.
As the operation progresses, the Immigration compliance teams may take further action and suspend or revoke employers’ accreditation where they are in breach of their obligations.
Migrant workers
Steve Watson, General Manager Immigration Compliance and Investigations said Immigration Compliance, Investigations and Verification teams focused on employers complying with their obligations to migrant workers as accredited employers. “The compliance and investigations teams will deal with unlawful workers and the employers who exploit them by holding them to account.”
A team from Tenancy Services was on standby during the operation in case the site visits uncovered issues with accommodation provided to workers.
Brett Wilson, National Manager, Compliance and Investigations at Tenancy Services, said it is important employers ensure any accommodation they provide for employees meets required standards.
Numerous referrals will be made to the Companies Office as a result of information gathered during the operation. This will help the Companies Office check that company directors are operating lawfully and meeting their obligations in accordance with the Companies Act 1993.
“A strong construction sector is good for New Zealand and we want businesses to achieve success by operating fairly and lawfully, and by doing the right thing,” said Mr Humphries.
Mr Humphries says the various teams involved in the operation are now reviewing data collected and cannot provide details at this time about what specific issues have been identified and what enforcement action might be necessary.