Labour Inspectors make sure workplaces provide for the minimum employment standards and laws set out in the following employment-related Acts.
- Employment Relations Act 2000 (external link)
- Equal Pay Act 1972 (external link)
- Holidays Act 2003 (external link)
- Minimum Wage Act 1983 (external link)
- Parental Leave and Employment Protection Act 1987 (external link)
- Volunteers Employment Protection Act 1973 (external link)
- Wages Protection Act 1983 (external link)
The role of Labour Inspectors is primarily to monitor and enforce compliance with employment standards, such as the requirements relating to:
- the minimum wage
- holiday pay
- leave entitlements
- wage deductions, and
- record keeping.
The focus of Labour Inspectors is employment standards. They don’t give advice about general disputes, employment relationship problems and contractual matters contained in employment agreements (such as rates of pay above the minimum wage).
Inspectors investigate complaints and also use targeted investigations and audit programmes to find breaches.
Which matters are investigated is decided depending on the nature and severity of potential breaches, apparent evidence and circumstances, balanced with resourcing and specific Labour Inspectorate focus at the time.
Labour Inspectors have powers that enable them to carry out their investigation and enforcement role. These include the power to:
- enter a workplace (or what is thought to be a workplace) at any reasonable hour and bring others with them (including the police)
- interview anyone at the workplace including the employer and employees
- see and take copies of wages and time records, holiday and leave records, other documents with remuneration information or any other document that the Labour Inspector reasonably believes will help them determine whether the relevant Acts have been complied with. Employers have to make these available right away and if they don’t, the Labour Inspector can bring an action against them for a penalty
- see and take copies of strikes and lockouts information
- require the employer to provide copies of wages and time records, holiday and leave records and employment agreements
- question employers about compliance with any of the specified employment-related laws. Employers don’t have to answer questions from a Labour Inspector if it is something that might incriminate them with regard to a criminal matter. Otherwise they are required to answer.
Sometimes determining if there has been a breach of employment standards involves forming an opinion on the employment status of workers. Labour Inspectors also have powers that enable them to investigate whether a worker is performing work as an employee or not.
If a Labour Inspector sees or gets a copy of a document from an employer, they have to keep the information safe and can’t disclose it unless for the purposes of a specified employment-related Act or to share it with a regulatory agency in accordance with the Privacy Act 1993.
Labour Inspectors carry warrants. If someone comes to a workplace and says they are a Labour Inspector but the employer is not sure that this is true, the employer should ask to see their warrant.
If a Labour Inspector comes to a workplace and the employer is not present the Inspector can still continue with their visit, but they must leave a notice for the employer.
Inspectors can take various forms of enforcement action when breaches of employment standards are detected. This includes:
- enter into an Enforceable Undertaking with an employer to underpin an employer’s steps to correct a breach
- issue an Improvement Notice to require an employer to take steps to correct a breach
- issue an Infringement Notice with a fine for breaches of record-keeping obligations such as employer failing to have an individual employment agreement in writing
- take a case to the Employment Relations Authority to seek an order for:
- penalties (of up to $10,000 against an individual or $20,000 for companies)
- arrears of wages
- compliance with the law (or an Enforceable Undertaking or Improvement Notice), and
- take action to the Employment Court for serious breaches of minimum entitlement provisions, seeking the order of:
- a declaration that a breach was serious
- pecuniary penalties (of up to $50,000 against an individual, or the greater of $100,000 or 3 x the financial gain, for companies)
- a compensation order to pay employees who have suffered loss or damage (such as lost wages)
- a banning order preventing a person or entity from acting as an employer for up to 10 years
- take actions to the Employment Relations Authority and Employment Court against persons involved in breaches of employment standards (as well as the employers who performed the breaches), seeking the order of sanctions against those persons.