Government announces tough new Employment Standards Bill

The government announced the introduction of new legislation today, which will see a crackdown on employers who allow standards to slip in their workplace.

Government announces tough new Employment Standards Bill
The New Zealand government has approved new measures to strengthen the enforcement of employment standards, it was announced today.

The changes will be included in an Employment Standards Bill, which is due to be introduced to Parliament this year.

Before the legislation comes into force, the Ministry of Business, Innovation and Employment (MBIE) will develop an information and education plan to inform both businesses and workers of the changes.

The new law will include:
Tougher sanctions
  • For the most serious breaches, such as exploitation, cases will be heard at the Employment Court and carry maximum penalties of $50,000 for an individual and at least $100,000 for a company.
  • Employers will be publically named if the Employment Relations Authority (ERA) or Employment Court finds they have breached minimum standards.
  • Individuals will also face the possibility of being banned as employers if they commit serious or persistent breaches of employment standards.
  • Persons other than the employer – such as directors, senior managers, legal advisors and other corporate entities – will also be held accountable for breaches of employment standards if they are knowingly and intentionally involved when an employer breaks the law. These cases can be pursued even if the employer ceases to exist.
  • The penalties at the ERA for minor to moderate breaches will remain at $10,000 for an individual and $20,000 for a company.
Clearer record keeping requirements 
  • Record keeping requirements for wages, time, holidays and leave will be made consistent across all employment legislation.
  • There will be flexibility around the format for records, given that they comply with the law.
  • Infringement notices will be introduced for clear-cut breaches of these obligations with a maximum penalty of $1,000 per breach and a cap of $20,000 if there are multiple breaches.
Increased tools for labour inspectors 
  • Information sharing: There will be enhanced information sharing powers with other regulators such as Immigration New Zealand, the Companies Office and Inland Revenue to improve the ability of labour inspectors to identify and investigate alleged breaches.
  • Information requests: Labour inspectors will be able to request any record or document from employers that they consider will help them determine whether a breach has occurred.
Changes to the ERA’s approach to employment standards cases
  • More employment standards cases, particularly those that involve more serious or intentional breaches of employment standards will be resolved at the ERA Authority or Court, rather than being automatically directed to mediation services in the first instance as is currently the case.
  • If it wishes, the ERA will continue to be able to send cases to mediation if they involve other employment relationship problems, or if it considers that mediation will contribute constructively to addressing the problem.
  • Employees will be able to seek penalties at the ERA for any minimum entitlement breach.
“Employers are the backbone of our economy and most do a great job in meeting their employment obligations, but there are a number of serious breaches occurring,” said Workplace Relations and Safety Minister Michael Woodhouse. “Those who breach minimum employment standards have an unfair advantage over law abiding employers and it is unfair on employees who work hard to support their families. Stronger sanctions for serious breaches will send the message that this type of conduct is unacceptable.”

“The package targets the worst transgressions of employers without imposing unnecessary compliance costs on employers in general,” he added.

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