Labour Inspectors cracking down on Minimum Standards – what does this mean for Employers?


If your business depends on employing migrant workers, then you will want to ensure that you are complying with the minimum employment entitlements as defined by the Employment Relations Amendment Act 2016.

These minimum entitlements are; a written employment agreement, minimum rate of pay, break entitlements, annual and public holidays, a safe workplace, accurate pay and holiday records, parental, sick and bereavement leave. Breaching these provisions can result in infringement notices and/or penalties being imposed on the Employer. A Labour Inspector, the Employment Court and/or the Employment Relations Authority have the power to issue penalties and infringement notices.

In addition, Employers who receive an infringement notice or penalty for less than minor breaches will be deemed non-compliant with New Zealand employment law and may then be subjected to a set stand down period.

This stand down period will exclude an Employers eligibility to support work visa applications. If the Employer has migrant workers employed within their business at the time they are deemed to be non-compliant, these migrant workers will be able to work up to the expiry of their work visa. However such workers will not be able to extend their work visa with the non-compliant Employer. 

Stand down periods can range from six (6) months to two (2) years. The length of the stand down period will be dependent on the severity of the breach and the subsequent penalty imposed. For example a six (6) month stand down period may result in a penalty of $1,000.00 or less, whereas a two (2) year stand down period may result in penalties of $50,000.00 and over.

The intent of the stand down period is not to penalise those Employers who have committed very minor breaches and who demonstrate a desire to comply with minimum standards. Such Employers are unlikely to be subjected to a stand down period, however this will be assessed on a case by case basis.

There are further implications for an Employer who is subjected to a stand down period. If an Employer is subject to a stand down period their name will be published on a stand down list that is readily accessible to the public. This list will name the Employer, state what legislation they have breached and specify the length of the stand down period they are subject to. The list is updated weekly and is maintained by the Labour Inspectorate. It can be accessed globally and so the implications for an Employer could be significant and serious, particularly in regards to hiring migrant workers after the expiry of the stand down period.   

If an Employer is deemed non-compliant and subjected to a stand down period, they will be able to appeal the decision. The Employer can request a hearing at the District Court to challenge an infringement notice or an Employment Relations Authority determination. To challenge an Employment Court decision, an Employer may apply to the Court of Appeal for leave (permission) to appeal the Employment Courts decision.

Employers who depend on migrant workers to make up the majority of their staff should ensure that they are familiar and compliant with minimum employment standard requirements to avoid being subjected to a stand down period.

If you require any advice or help to ensure that your business is compliant with minimum employment standards feel free to give us a call.


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