Posted on: Oct 27, 2015

The Government has introduced the Employment Standards Legislation Bill. In essence, this is to provide harsher sanctions for exploitative employment practices involving breach of statutory minima relating to wages and holidays. Greater investigative powers for Labour Inspectors and employment institutions will assist in bringing perpetrators to account.

At present, the maximum fine is $10,000 for an individual and $20,000 for a company. For the most serious breaches, the plan is to raise these to $50,000 for an individual and, for a company, to the greater of (1) $100,000 or (2) three times the company’s financial gain. The Employment Court and the Employment Relations Authority will be able to publicly name employers who breach employment standards.

Persons such as directors, senior managers, legal advisers and other corporate entities will be held accountable for breaches if they are knowingly and intentionally involved when an employer breaks the law, even if the actual employer has ceased to exist. The Ministry of Business, Innovation and Employment says that the law could catch a senior payroll manager who has set up a payroll system in such a way as to deny employees some holiday entitlements, though it wouldn’t catch the junior clerk.

Labour Inspectors will be equipped with powers to request business information relevant to their enquiries and regulators will have more information sharing powers generally. Though this cannot breach the Privacy Act, an “Approved Information Sharing Agreement” between labour inspectors and another regulator may permit a dispensation from the Privacy Act principles.

Clear-cut breaches of the obligations to keep employment agreements and employment records and to produce them on request can be punished by the imposition by a labour inspector of infringement fees. On the whole, more major breaches of employment standards will be fast-tracked to the Employment Relations Authority and the Employment Court, without the necessity (as is currently the case) for prior mediation.


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