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Non-compliance with minimum employment standards

Published: 29th May 2017

Author: Andrew Wallace, Lowndes Jordan

Published in: Commerical Speaking | Issue #46

It will all come out in the wash: non-compliance with minimum employment standards

The Employment Relations Authority (ERA) has imposed a significant penalty of $145,000 on Manukau Auto Valet Limited for its failure to pay minimum wages and/or holiday pay to at least 115 of its employees.[1] The penalty was imposed in addition to Manukau Auto Valet’s reimbursement of $96,451 to its employees, which was owed as a result of its non-compliance.

In total there were 322 separate breaches of employment law, each being capable of being penalised with a fine of up to $20,000 that created a total potential liability of $6,440,000. However, as is usual in situations like this, the ERA applied a globalised approach in respect of the breaches and considered other relevant matters such as Manukau Auto Valet’s co-operation. The penalty was reduced to $145,000, which is still a significant sum.

We remind employers to ensure that your payroll systems and record keeping meet all the relevant employment law requirements. Otherwise there could be an expensive lesson.


[1]   Labour Inspector of the Ministry of Business, Innovation and Employment v Manukau Auto Valet Ltd [2017] NZERA Auckland 85

 

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