Complaints probed: Employers pocketing wage subsidy face fraud charges

Money in pocket
Around 291 complaints are in the process of being assessed by MBIE. Photo credit: Getty.

Fraud charges are on the cards as complaints by workers in lockdown over their employers pocketing the Government's wage subsidy are now being probed.

Ministry of Business, Innovation and Employment spokesperson Stu Lumsden told Morning Report the body was assessing 291 complaints so far and that prosecutions for fraud could be on the cards for companies found pocketing money.

He said teams were looking at whether some employers were attempting to come out the other end on the lockdown in a better position at the expense of staff.

The $585-a-week subsidy requires employers to use their best endeavours to pay people up to 80-percent of their pre-lockdown wage.

A hospitality worker told RNZ that, before the lockdown, she was being paid about $450 per week, but says her boss is now claiming the full $585 on her behalf and only passing on $350 of this, taking the other $235.

Lumsden said if the wage subsidy was being wilfully withheld it would constitute fraud and that action would be taken by the Ministry of Social Development (MSD), Inland Revenue or police.

"The line only opened up on Monday. So we've to get 291 cases in and we're loading those up, we're starting to allocate resources now to start those calls and to ascertain what the situation is."

He said no cases had been passed on to the police so far and that six cases had been sent to MSD.

The official confirmed a complaint against New World had been sent to MSD after reports the supermarket giant, which remains open as an essential service, applied for a subsidy.

The worst offenders seemed to be operators in the hospitality sector, Lumden said. "They, like many businesses, don't have any income coming in at the moment."

But the labour inspectorate was concerned people were not receiving correct information around the scheme.

In many cases there had been misunderstanding with workers not understanding what the employer was doing, he said, so that mediation was offered as a means of resolving the issue as a first step.

The wage subsidy was only one issue the organisation had received complaints about and others involved general breaches of employment standards.

Stu Lumsden, national manager labour inspectorate talks to Morning Report.

"We've had a conversation with a number of people: one of the most common complaints to date is that people have been forced to take their annual leave, sick leave or anticipated leave.

"They seemed to have failed to see that employment standards have not gone away during this particular issue," he said.

* If you would like to know if your employer is receiving a wage subsidy grant, a full list of recipients is published on the Ministry of Social Development website. If an employee has any concerns they should then contact the Employment Services website and complete a complaint form.