Directors face personal liability after Labour Inspectorate uncovers widespread breaches
Two New Zealand healthcare companies and their directors have been ordered by the Employment Relations Authority (ERA) to repay more than $147,000 in wage and leave arrears after admitting to widespread breaches of minimum employment standards.
ERA member Sarah Kennedy-Martin ordered SS Health Limited to pay $114,479.14 and LW Health Limited to pay $33,382.61, for a combined total of $147,861.75, following a Labour Inspectorate investigation into both companies.
The two matters were consolidated into a single proceeding given "the close relationship between SS Health Ltd and LW Health Ltd, the similarities of the breaches, and the fact employees worked across both stores."
The parties reached a partial settlement ahead of the hearing, submitting a joint memorandum to the ERA on 2 July. Penalties and costs are yet to be determined.
Admitting to employment breaches
Both companies admitted to violations spanning multiple pieces of legislation, including failing to keep adequate wages, time, and holiday records; failing to pay the minimum wage for all hours worked; incorrectly calculating annual holiday entitlements at the end of employment; failing to meet public holiday and sick leave obligations; and making unlawful wage deductions in breach of the Wages Protection Act.
SS Health Limited also faced two additional violations under the Holidays Act 2003 relating to annual holiday calculations.
Personal liability was extended to two individuals named in the determination. Yinan Wang and Xiao Lin, identified as persons involved in the breaches at LW Health Limited, face joint and several liability for that company's arrears should it be unable to pay. Wang is additionally exposed over SS Health Limited's debt.
Under section 142Y of the Employment Relations Act 2000, the ERA ordered that any wages or other money owing may be recovered from Yinan Wang should SS Health Limited also default.
A lump sum of $42,000 was due by 27 August, with monthly instalments of at least $3,000 to follow from 20 September until both debts are cleared.
"If any of the payments referred to above are received more than five working days late the entire amount of arrears still owing will become payable immediately," the orders read.
Interest will apply to any outstanding balances from 1 June 2028, back-dated to the termination dates of the affected employees. The Labour Inspector will distribute recovered funds directly to workers, including the deduction and payment of applicable taxes.
