Failing to comply with minimum employment standards costly for employer

A recent Employment Relations Authority (ERA) hearing has found that a Dunedin bakery owner failed to pay its three employees correct wages, sick leave and holiday pay.

The workers employed by the bakery were paid for 40 hours per week no matter how many hours they worked. At times the employees worked more than 80 hours over a 6 day working week and the ERA investigation discovered they were also deprived of sick leave and holiday pay.

As a consequence of the employer’s actions, the payment of wages did not meet the minimum wage rate and the employer was found to have failed to keep and maintain accurate holiday and leave records.

The hearing found a number of breaches of minimum employment standards which included:

• failure to pay minimum wages
• failure to pay time-and-a-half
• failure to pay unworked public holidays
• failure to provide alternative holiday
• failure to pay total annual holidays
• failure to pay final holiday arrears
• failure to pay sick leave

The ERA ordered the owner of the bakery, as a person involved in the breaches, to pay penalties of $158,000 and a total of more than $193,000 to the three employees in minimum wage arrears, as well as $40,000 in leave entitlements. A costly mistake indeed.

As an employer, it is important that you understand your obligations when paying staff and recording leave and allowances. If you have any queries in relation to entitlements of your staff, get in touch with our team.