A Canterbury restaurant and its owner has been penalised for deducting wages illegally from a former employee and other breaches of employment standards.
The Employment Relations Authority (ERA) has ordered Rangiora businessman Vijay Singh and his company pay more than $40,000 in arrears and penalties to the employee exploited over two years.
Singh, the director of Laxmi Narayan Restaurant Ltd, which trades as Karfa Moroccan Cuisine, has also been ordered to pay an additional penalty of $11,250 to the Crown.
During the investigation, the ERA found that Singh violated several employment regulations which included underpaying his employee, under-recording hours and neglecting holiday pay.
Labour inspectorate Simon Humphries said: "Unfortunately, there are employers who abuse the visa process. They may agree to pay a worker a certain amount during the visa approval process, but once the worker is in New Zealand the employer pays them less than the minimum wage."
Some employers illegally deduct money from an employee's wages to get around contract agreements, Humphries said.
Singh's employee was working up to 60 hours outside of his contractual hours in exchange for obtaining a work visa.
The employee suffered stress and frustration at being paid less than he was entitled to, ultimately seeking employment elsewhere.
"Employers must ensure they pay employees what was agreed during the visa approval process. If they don't, they risk being penalised and not meeting accreditation requirements," Humphries said.
Laxmi Narayan Restaurant Ltd has been ordered to pay the following:
- minimum wage arrears of $19,320.53
- unlawful deductions of $3,865.79
- holiday and leave arrears of $3,674.07
- interest of $2,019.27.
In addition, it must pay penalties of $17,000 while Singh must pay a penalty of $5500.
Half the penalty must be paid to the employee and the other half will go to the Crown. If Laxmi Narayan Restaurant Ltd is unable to pay, Singh is liable for both amounts.
"There is no place for dishonest and unlawful behaviour in New Zealand workplaces. Employers can expect to be heavily penalised and this can include repaying underpayments," Humphries said.