New Zealand Investigates Employers for Underpayment of Employees

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By Molly Ward

April 1—Targeted investigations of payroll-related underpayments resulting from changes of the Holidays Act are planned, New Zealand's Labor Inspectorate said in a news release March 31. Changes to the Holidays Act included special calculations for employees with fluctuating hours and payments.

“At risk employers are those who have employees who have fluctuations in the hours they work, or receive additional pay on top of their normal wages, such as for shift work or commission payments,” Labor Inspectorate General Manager George Mason said.

The issue arises because many employers have been using a “set and forget” approach to payroll instead of making sure leave payment calculations are taking into account the fluctuations in the hours worked or pay received. The amount of money that is owed and that should have been paid earlier to employees varies, ranging from an average of NZ$70 ($48) per worker to NZ$1,800 ($1,236) per worker, the Inspectorate said.

The move by the Labor Inspectorate comes after it was revealed that its own umbrella department, the Ministry of Business, Innovation and Employment, had paid thousands of employees the wrong holiday entitlement amounts.

Forty-two employers already have been investigated for payroll-related underpayments to employees since 2012, the Inspectorate said.

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For More Information

The news release can be found at

More information on payroll issues in New Zealand can be found in the New Zealand country primer.