Christchurch employer penalised for charging employment premium

The Employment Relations Authority (ERA) has imposed a penalty on a Christchurch milk distribution business for charging a migrant worker an employment premium for her job that resulted in take home pay of $4.37 an hour.

The Labour Inspectorate in the Ministry of Business, Innovation and Employment took the case to the ERA which ordered a $5000 penalty against JP and JD Bowden Partnership. In addition, the affected employee was repaid the $8260 she was charged in employment premiums over the course of her employment.

Labour Inspectorate Southern Regional Manager Steve Watson said charging employment premiums was a clear breach of the Wages Protection Act.

“This was a serious breach of minimum pay entitlements for the worker concerned and it also meant this business gained a competitive advantage through unlawfully employing her on such a cheap rate. She even had to cover her own tax payments,” Mr Watson says.

“The message to employers from this ruling is clear. Firstly, employment premiums are unlawful and the Labour Inspectorate will pursue people who breach the law like this.

“Secondly, some people do not have the required skills and commitment to comply with their obligations, and should not be employers. The Labour Inspectorate will take any enforcement action necessary to encourage these types of employers to exit the labour market,” Mr Watson says.

The Ministry encourages anyone in this situation, or who knows of anyone in this situation, to call its contact centre on 0800 20 90 20 where their concerns will be handled in a safe environment.

The Employment Relations Authority’s determination on this case is here.

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