The Employment Relations authority says a national trend for employers to treat employees as contractors to avoid keeping records, making payments to the IRD and paying minimum wage and holiday entitlements is disappointing.
It has ordered wage arrears be paid to workers and imposed a penalty on a Christchurch construction company for failing to provide the minimum wage and keep accurate employment records.
Verney Construction Limited was investigated by the Labour Inspectorate last year after receiving a complaint from two employees involved in the Christchurch rebuild.
It found that the employer had been treating the workers as contractors when in fact they were employees. They had not received the minimum wage or their final holiday pay and were not provided with employment agreements.
The Inspectorate brought the case before the ERA after the employer failed to provide employment agreements, time, wage and holiday records despite multiple requests and the issuing of an improvement notice.
The ERA found that the employees should be paid the sum of the minimum wage and holiday pay arrears calculated by the Inspector (including interest). They also issued Verney Construction with a penalty of $2,000 for breaching orders of compliance.
Labour Inspectorate southern regional manager Stuart Lumsden says employment records are required to be kept by law and failure to comply with a labour inspector’s request for them is a breach of the Employment Relations Act 2000.
“This is a disappointing trend that we are starting to see nationally – employers treating employees as contractors to avoid keeping records, making payments to IRD and paying the minimum wage and holiday entitlements.
“The Labour Inspectorate takes any breaches of minimum employment rights seriously.
The ERA has issued a penalty, sending a clear message to employers that failure to comply with the minimum labour standards will result in enforcement action,” says Lumsden.
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.
