The Employment Standards Legislation Bill has been introduced to parliament, proposing changes to strengthen enforcement of employment standards.

This will introduce tougher sanctions for breaches and greater accountability for people and entities associated with the employer — such as directors, senior managers, legal advisors — if they are knowingly involved when an employer breaks the law.

The changes target unfair practices such as unreasonable deductions from employees’ wages; or where an employer does not commit to hours of work, but expects employees to be available when required; or where an employer cancels shifts without providing reasonable notice or compensation to the employee.
Penalties

Serious breaches, such as exploitation, will carry maximum penalties of $50,000 for an individual and the greater of $100,000 or three times the financial gain for a company. Individuals who commit serious or persistent breaches of employment standards may be banned as employers.

The penalties for minor to moderate breaches will remain $10,000 for an individual and $20,000 for a company. Employers who have breached minimum standards may be publically named.

Employment records

Record-keeping for wages, time, holidays and leave again come under scrutiny. Requirements will be made consistent across all employment legislation.

The core requirement is that, when an employee or labour inspector requests it, an employer must be able to produce an easily accessible record of the number of hours worked each day in a pay period, and the pay for those hours.

Breaches will attract infringement notices, with a maximum penalty of $1,000 per breach capped to $20,000 if there are multiple breaches.

Labour inspectors’ powers

Labour inspectors will have greater ability to share information with other regulators such as Immigration New Zealand, the Companies Office and Inland Revenue to better identify and investigate alleged breaches. They will also be able to request records or documents from employers (such as financial records or bank statements) that they consider will help them work out whether a breach has occurred.
There is no set timetable for the proposed legislation yet. We’ll keep you up to date with progress.