Labour Inspectorate Visits Just Got More Serious
Most business owners know a visit from the Labour Inspectorate isn’t exactly a highlight of the week – especially with targeted inspections now underway across retail, hospitality, construction, security, horticulture, viticulture, and dairy sectors.
But things just got even more serious.
As of March 13, 2025, employers who intentionally fail to pay employees their wages or entitlements can now be charged with theft under the Crimes (Theft by Employer) Amendment Act.
This includes unpaid wages, holiday pay, and other entitlements under the Holidays Act 2003 and the Minimum Wage Act 1983.
But What Does This Really Mean?
Most of us don’t intentionally underpay staff – but mistakes or assumptions can quickly land you in hot water.
For example:
You used to pay time and a half for overtime, but due to a downturn, you’ve stopped. If that change isn’t documented and signed by both parties, it could be considered a breach of contract – and potentially an intentional failure to pay.
What Should You Do?
- Review all employee agreements – Are staff on the correct contract for the work they’re doing? For example, are they truly casual? Check here: govt.nz/types-of-worker
- Cross-check your contracts with your payroll system – Any discrepancies?
- Ensure your payroll provider or accountant is calculating PAYE, KiwiSaver, leave, and entitlements correctly
- If issues are found, act fast: Investigate thoroughly, meet with the employee in a transparent and respectful manner, and resolve the issue immediately.
Why It Matters:
Penalties for non-compliance are steep:
- Individuals – Up to 1 year in prison or a $5,000 fine
- Companies – Fines up to $30,000
Don’t leave it to chance. Now’s the time to get your house in order. For more information and guidance, visit employment.govt.nz or call the team today on 022 602 7877.
