9 August 2016

Grocery store penalised $53,000 for exploiting vulnerable migrant worker

A Wellington grocery store has been ordered to pay more than $53,000 in penalties and arrears by the Employment Relations Authority (ERA) for employment law breaches, including making a migrant employee pay more than $10,000 in premiums.

“The exploitation of migrant workers in New Zealand is unacceptable,” says Labour Inspectorate Regional Manager Loua Ward.

“No employer should require employees to pay premiums or pay wages back. Employees must be paid for all hours they work, and employers are required by law to keep proper time and wage records for all staff,” says Mrs Ward.

The employer, Sun 2 Moon Limited, which is located on Willis Street in the Wellington CBD and operated by Luv Kumar Khatter, required the migrant worker to pay more than $10,000 in premiums, by way of a payment of $5,000 upfront, $3,240 in regular small cash payments, and $2,167 funding company expenses on the employees personal credit card.

The ERA ordered this money to be returned to the employee, citing premiums as an abuse of the power imbalance between employers and employees, particularly where the employer is effectively taking advantage of a migrant worker.

A total of $25,000 was ordered to be paid as a penalty for breaching the Minimum Wage Act, Employment Relations Act, Wages Protection Act and Holidays Act by the ERA, in addition to the $28,781.23 is to be paid to the employee for minimum wage arrears, reimbursement of premiums and holiday pay arrears.

The Ministry of Business, Innovation and Employment’s (MBIE) Labour Inspectorate brought the case before the ERA against Sun 2 Moon Limited, after receiving a complaint from the employee about being paid less than the minimum wage, not being paid for all hours worked, being required to pay premiums, and not receiving holiday pay or additional pay for working on public holidays.

Targeting employers that exploit vulnerable migrant workers is a key focus area for the Inspectorate.

“The level of non-compliance identified during this investigation was very disappointing given the significant breaches of minimum employment standards,” says Mrs Ward.

“This ruling sends a clear message to employers that failure to comply with minimum employment labour standards will not be tolerated,” says Mrs Ward.
Employers who breach the employment law will be subject to enforcement action, which can include penalties of up to $50,000 for individuals, and $100,000 or three times the financial gain for a company.

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.
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