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A recent decision by the Employment Relations Authority (ERA) has highlighted the high financial cost of breaching the minimum employment law standards following investigation by a Labour Inspector.  Employers need to be aware that the Inspectorate is well resourced and proactively looking into minimum employment standards, including record keeping.  Media attention this week on the new statistics that 1 in 10 employees do not have written employment agreements signals that this attention on “the basics” is set to continue.

Case summary
Sun 2 Moon Limited employed Mr Singh in its grocery store.  Mr Singh claimed that he was required to pay a sum of $11,727.22 in instalments to the company. It was explained to him that he was required to ‘invest’ in the business to secure his position and obtain assistance for his permanent residency application.   The ERA concluded that this payment was a premium which is prohibited under s12A of the Wages Protection Act 1983.

As the company did not have adequate wage and time records, the Labour Inspector determined that Mr Singh was not paid the correct minimum wage rate for the period of his employment.  He also was not paid holiday pay or the correct payment for working public holidays.

Mr Singh was awarded a total of $28,781.23 for payments owed to him, including re-imbursement for the penalties previously paid.

The company was also ordered to pay more than $25,000 in penalties for its absolute failure to comply with Minimum Wage Act 1983, Employment Relations Act 2000, Wages Protection Act and Holidays Act 2003.

What records must an employer keep?
All employers must keep written wage and time records, including the following, in relation to each employee:

Name, postal address, age (if under 20 years) and the date they started working.
If they’re on an individual employment agreement or a collective agreement (and the title and expiry date of the agreement and the employee’s classification) and a copy of the agreement.
The kind of work they are employed for.
The number of hours worked each day in a pay period and the pay for those hours
Details of any employment relations education leave taken.
The wages paid in each pay period and how these have been calculated.
The dates they last became entitled to annual holidays and sick leave and their current entitlement to annual holidays and sick leave.
The dates of leave taken, including annual holidays, sick leave and bereavement, and payment received for each.
Any annual leave cashed up as well as the date and amount paid for each entitlement year.
The dates and number of hours worked on public holidays and the payment for these; the date (or 24-hour period) the public holiday or any part of it has been transferred to, and the date the employee became entitled to any alternative holiday (day-in-lieu).
The dates of, and payments for, any public holidays or alternative holidays they didn’t work but were entitled to holiday pay.
The cash value of any alternative holidays they gave up for payment.
The cash value for any board and lodgings provided.
The date when employment ended, and the amount of holiday pay they received at the end of employment.
A copy of their tax code declaration (IR330).
If you would like to know more about record keeping requirements, or would like them reviewed to ensure they are compliant, please contact us.

Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek guidance from your lawyer for any questions specific to your workplace.