Employment due diligence questions for recruiters and employment brokers

Questions that recruiters and employment brokers should ask before placing candidates in another business or organisation.

Before you place a candidate (prospective worker) into a business or organisation, and during their assignment, you should consider the steps below as part of your due diligence process:

  • Establish if the employer’s business already undergoes checks for compliance with employment standards.
  • Establish if the employer has been in breach of regulatory requirements relevant to employment-related worker terms and conditions, or is currently under investigation.
  • Establish if the employer is proactive in ensuring that employees receive all their wage and legal entitlements.
  • Establish continued fair treatment of worker after placement.

Establish if the employer’s business already undergoes checks for employment law requirements

If an employer already undertakes checks or audits for compliance with employment standards this may provide assurance that the employer is compliant. Some industry associations require members to undergo audits that include how they treat their workers. Any deficiencies found through such reviews should have been addressed with utmost priority, with the focus on ensuring that any shortcoming in entitlements was remedied.  

One way to do this is to ask the following questions:

1. Does the business undertake a third-party or internal audit that checks for fair treatment of workers, including compliance with employment standards? If yes, please provide details:

  • Name of the audit/certification/programme?
  • Frequency of the audit?
  • When the audit was last conducted?
  • Were there any issues identified and/or action(s) taken to resolve the issues?
  • Does the employer have a membership with an industry body or association?

2. If the employer is part of a business or industry association or body please name them.

Establish if the employer has been in breach of regulatory requirements relevant to employment

If the employer has breached employment standards, find out what they did to resolve the issue. Think carefully about the risks of placing a client into a business that is being investigated. 

You can ask the following questions:

  • Is the employer currently on the 'stand down list' below that affects their ability to recruit migrant labour as a result of having breached employment standards or immigration rules?
  • Has the employer ever breached employment standards as found by the Labour Inspectorate, Employment Relations Authority (ERA) or Employment Court? If unsure, you can check their databases below.
  • Is the employer currently party to legal proceedings claiming non-compliance with employment standards? This information may not be publicly available, and should be requested from the employer directly in the first instance. They are not obliged to answer. However, if they decline to provide an answer you may find this is useful information to decide whether you want to engage with this employer.
  • Has the employer or business ever employed migrant workers who are not allowed to work by Immigration New Zealand? If yes, please provide details. 

Stand-down list for recent breaches of employment standards [PDF 230KB]

Employment Law Database – Employment Relations Authority

Judgements Database – Employment Court (external link)

Be proactive in ensuring candidates receive all their wage and legal entitlements

Question 1

Do their employees have written employment agreements, individual employment agreements or collective agreements?

Answer: The employer must be able to answer yes under the law, check if the employment is compliant with the minimum details that an employment agreement must contain

Question 2

Do they keep accurate and up-to-date records of wages, time, leave and holidays?

Answer: The employer must be able to answer 'yes' under the law. Find out more about the requirement below.

Question 3

Do they pay their employees minimum wage or above for every hour worked?

Answer: The employer must be able to answer 'yes' under the law. Find out more about the requirement below.

Question 4

Do they provide their employees with regular payslips? Pay slips are not mandatory, but employees can ask for one at any time and the employer must provide them with information about their pay and leave.

Answer: An employer demonstrates good practice if they can answer 'yes'.

Question 5

Are employees provided with information about their employment rights?

Answer: An employer demonstrates good practice if they can answer 'yes'.

For employers who cannot demonstrate compliance with at least questions 1 to 3 above, there is information and resources available to help them comply:

Establish continued fair treatment of candidates after placement

Once your placed candidate has started in their role, you should check they are being treated fairly. Ask the placed employee the following questions:

  • Were you given a copy of your written employment agreement, and can you access it?
  • Are you given a regular payslip?
  • Do you feel you know your employment rights? Have you been told where to find more information about them?
  • Do you get paid at least the minimum wage for all the hours you work? Did you get paid while you were being trained for your job?
  • Have any of your conditions changed or got worse since you started the job?
  • Do you know how to approach your employer if you have concerns about your job?
  • If boarding and meals are part of your payment, is the cost reasonable? Is your accommodation of a legal standard? For example, service tenancies must include working smoke alarms or detectors within three metres of each bedroom door. They must also have ceiling and under-floor insulation and an insulation statement. For more information, see Service tenancy – Tenancy Services (external link)
  • Has your employer asked you to pay back any of your wages, or make a deduction from them, that you have not agreed to in writing?
  • Do you have to pay for your own safety equipment or anything you need to do your job? For more information, see deductions.
  • Do they have written policies, or a code of conduct, to deal with bullying, sexual harassment or discrimination?

 

You should continue to monitor for compliance with timely checks

  • The first check should be completed within the first month of employment.
  • The second check completed after the first 6 months of employment.
  • Following checks are made every 12 months (annually), starting 18 months from after the employment started.

If any of the responses to these questions above raise concerns then this should be discussed with the employer and a resolution sought.

Where practicable, the employer should also be required to immediately inform you if the following occurs:

  • Their business is investigated by the Labour Inspectorate or Immigration New Zealand.
  • There are changes to the working arrangements with any employees that you have placed.

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Page last revised: 12 October 2022

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