Regulators have swept through 147 construction businesses across North Island
Regulators have visited 147 construction businesses across the North Island in a large-scale operation targeting unlawful activity, worker exploitation, and serious non-compliance in the sector.
The week-long exercise, dubbed Operation Rimu, was led by regulatory teams from the Ministry of Business, Innovation and Employment (MBIE), with Labour Inspectorate, and Immigration Compliance and Investigations staff conducting site checks and Tenancy Services and the Companies Office on standby.
Inspectors focused on businesses in Auckland and centres including Napier, Morrinsville, Pōkeno, Wellington, Tauranga, New Plymouth, and Hamilton. They checked compliance with employment, immigration, company, and tenancy laws.
Early findings identified evidence at several companies of breaches of minimum employment standards, cash-in-hand wage payments and poor record keeping.
Simon Humphries, head of the Labour Inspectorate, said some construction company directors acknowledged awareness of unlawful practices, particularly in Auckland's residential building market.
"They said there were whispers in the industry, particularly in Auckland residential construction, about instances of businesses being significantly undercut to a degree that raised suspicions about the legitimacy of competing contracts," he said.
During last week's site visits, Labour Inspectorate and Immigration teams looked for potential employment and immigration breaches.
Immigration officials are also checking that accredited employers are meeting their obligations and that migrant workers are complying with their visa conditions.
Tenancy Services also kept a team on standby in case any issues were detected with accommodation provided to workers. The operation is also expected to generate numerous referrals to the Companies Office to assess whether directors are operating lawfully under the Companies Act 1993.
As the operation progresses, immigration compliance teams may take further action, including suspending or revoking employer accreditation where obligations are breached.
"The compliance and investigations teams will deal with unlawful workers and the employers who exploit them by holding them to account," said Steve Watson, General Manager Immigration Compliance and Investigations, in a statement.
High‑risk sector under criminal scrutiny
The construction sector remains a high‑risk area for non‑compliance and worker exploitation, according to authorities.
Employment New Zealand received 516 complaints relating to the construction industry in 2025, with 56% coming from the Auckland region.
Regulators have also linked the sector to organised crime, alleging that criminal groups are exploiting weaknesses to launder money and mistreat workers by setting up sham or non‑compliant businesses that undercut legitimate operators.
"Operation Rimu is part of an ongoing collaborative focus on the construction sector, with MBIE regulators and partners including New Zealand Police working together to address serious criminal activity and non-compliance," Humphries said.
He described the initiative as part of MBIE's push to integrate its regulatory functions, bringing together multiple teams and partner agencies to provide a more coordinated response to harmful behaviour in key business sectors.
Detective Superintendent Greg Williams, New Zealand Police's Director of the National Organised Crime Group, said working alongside MBIE allows agencies to build a fuller picture of unlawful activity, spot offending trends and system weaknesses, and act more quickly.
"A key part of our approach also involves working with the industry to strengthen their processes and help put a stop to exploitation in the system," he said.
"This collaborative approach means we will ultimately make a much bigger impact against organised criminal activity and serious non-compliance."
Data gathered in earlier phases of Operation Rimu, including desk‑based audits of scores of other construction companies, is already being used to support ongoing investigations and compliance work by MBIE and its partners.
Humphries said regulators want a strong and successful construction industry, but one that competes on a level playing field.
"A strong construction sector is good for New Zealand and we want businesses to achieve success by operating fairly and lawfully, and by doing the right thing," he said.
