How to work out if you're being underpaid by your employer - and what to do if you are

Thousands of Kiwi businesses have been urged to check they're paying their staff enough, after an accounting software provider admitted some of its payroll calculations were wrong.

MYOB, which owns a range of payroll software products used by Kiwi businesses, told RNZ on Tuesday that it had found problems with seven of its systems.

The company found that its systems had not calculated leave rates or entitlements in a fashion consistent with the Holidays Act 2003 - a notoriously complicated piece of legislation.

MYOB is now urging Kiwi businesses to check they're not underpaying employees - but there are ways to work it out yourself, if you're worried your employer's got it wrong.

How to check if you're underpaid

Employment New Zealand (ENZ), which provides information to Kiwis on behalf of the Ministry of Business, Innovation and Employment (MBIE), says the first thing to check is your details and any relevant documents.

This includes wages, time, holiday and leave records, which your employer must keep accurate records of and let you access upon request. Some employees choose to keep a record of their own, so they can match it against their employers'.

The next thing to check is your employment agreement, which may include specific payments or payment rates which are better than the legal minimum wage, and your payslip and bank statement.

There are a number of details and relevant documents to check if you think you're being underpaid.
There are a number of details and relevant documents to check if you think you're being underpaid. Photo credit: Getty

If still nothing seems awry, the last thing to check are your workplace policies and other material and agreements.

"For example, there might be a workplace policy which gives employees an extra five days sick leave each year. Look at your workplace policies or any other material and agreements that might be relevant," ENZ advises.

If you're still unsure, the 'getting answers to questions you might have' section on the ENZ website can answer your more specific questions.

What to do if you're underpaid

If you've identified a problem with your pay - that it's too low, for instance, or incorrectly calculated - ENZ says you should approach your employer first to discuss it.

"You should approach discussions with your employer with an open mind - they may have simply made a mistake rather than be trying to underpay you," it says.

"You can take a support person or representative with you."

If you're still at loggerheads with your employer following these discussions, however, you can escalate it by contacting ENZ, talking to your union or talking to a legal representative.

You can also go to a mediation session, lodge a personal grievance with your employer or lodge an application with the Employment Relations Authority (ERA).

Why employers are sometimes left out of pocket

Dr William Hodge, a law employment expert at the University of Auckland, told Newshub workers can be left out of pocket both deliberately and accidentally by employers.

One tell-tale sign your boss might be deliberately taking advantage of you, he says, is if you don't get a regular payslip.

The onus is on the employer to keep wage and time records, Dr Hodge says, and all that information must be made available to employees if they ask for it.

"If something's gone wrong, it will come out at that point," says Dr Hodge.

No arbitrary deductions for things like transport or accommodation can be from your salary unless they are "overtly described" in the contract.

Dr Hodge says he believes he is seeing more cases of companies being investigated for wrongdoing, though it is hard to say if that's because more employers are taking advantage of workers or whether authorities and employees are becoming more vigilant.

"I think there is more of it," says Dr Hodge. "But it is a combination of more prosecutors, workers being more aware of their rights and inspectors being able to devote more resources to it - all of the above."

Dr Hodge says the most at-risk industries are hospitality, agriculture and labour services.

When it comes to accidental causes, Dr Hodge says most mistakes come down to companies not fully understanding the Holidays Act. The act is so confusing, in fact, that MBIE even got it wrong, revealing in 2016 it had miscalculated holiday pay for thousands of its own staff.

The police mucked it up too, having to fork out $30 million after underpaying staff for the same reason. Auckland Council and the Department of Corrections are also on the list of those that have got it wrong.

Dr Hodge says the biggest issue with the Holidays Act is that it was made for an era when everyone worked Monday to Friday, 9am to 5pm. But with more people working irregular hours, the act no longer works like it should.

"The old statute is almost impossible to apply to new working patterns," he says.