Director and company both liable after workers locked in premises and paid half wages
A New Zealand company director now faces personal liability for wage theft after his laundromat systematically underpaid migrant workers locked inside factory premises at night.
The case, decided January 21, 2026, by New Zealand's Employment Relations Authority in Auckland, demonstrates how personal exposure for employment violations extends beyond corporate protections when workers are exploited.
Yang Yang, sole director of Miaodi's Laundromat trading as Mr Suds, was held jointly and severally liable alongside his company for underpaying four Chinese workers who repeatedly worked double their contracted hours but received only half their wages.
The workers arrived in New Zealand between February and September 2023 on special work visas meant for factory positions. What made this case striking was how a business with official government accreditation to employ overseas workers systematically exploited them under the guise of cash flow management.
Yu Chunyan, Sun Tingting, Liu Danhua, and Zhang Shijie were each hired for 30 to 32 hours weekly. All four testified they routinely worked 60 to 70 hours but were paid only their contracted minimums. Yang told the Authority that workers were informed during interviews that outstanding wages would be paid in December when business was strongest and money more available. The Authority found no written agreement supporting this arrangement and ruled the delayed payment left workers earning below minimum wage.
The workers lived at the factory and paid rent. They testified the premises were locked nightly and they couldn't leave. Several had paid Chinese recruitment agencies up to 70,000 RMB, roughly 14,500 NZD, for their positions. One worker said she paid a New Zealand agency 10,800 NZD and made additional payments to Miaodi's through an intermediary.
In December 2023, the workers contacted New Zealand's Ministry for Business, Innovation and Employment reporting migrant exploitation. By mid-January 2024, authorities granted them Migrant Exploitation Protection Visas, special permits allowing them to work anywhere while their claims were investigated.
The relationship collapsed in February 2024. The workers said wages stopped entirely for January and February, and management changed their schedules to fragmented 90-minute shifts. They believed this was punishment for complaining. On February 19, 2024, the HR manager posted a message suspending all four workers, citing "special circumstances."
Yang claimed the suspension was necessary after discovering the workers held different visas than originally issued. The workers admitted they hadn't disclosed the visa change because they were frightened.
Authority member Eleanor Robinson ruled the workers were unjustifiably dismissed. "No formal termination had been provided to the Applicants, however no work was provided to them after 19 February 2024 when they were informed they were suspended pending clarification of their visa status," she wrote. "I find that constitutes a 'sending away' of the employee at the initiative of the employer."
The Authority ordered Miaodi's and Yang personally to pay each worker between 6,705 and 7,873 NZD in wage arrears, roughly 11,600 NZD each in lost wages, and 18,000 NZD each in compensation. The compensation was reduced 10 percent because workers contributed to their dismissal by not disclosing valid work visas when questioned. A 10,000 NZD penalty was also imposed.
For HR leaders, the implications are straightforward: corporate structures provide no shelter when employment standards are violated, government agencies actively protect exploited migrants, and deferred payment schemes don't override legal wage obligations.
