Employers’ obligations to keep records...

Employers are obliged to keep accurate wage and time records of all employees.  This includes things like annual holidays owing and taken.  In recent cases employees have been fined large amounts for failing to keep those records or keeping inaccurate records.  The Employment Relations Authority penalised one employer $40,000 for under recording hours worked.  This had resulted in the employees being short paid $87,000.  As well as the fine the employer also had to suddenly find the extra $87,000 it had underpaid its employees.  It probably also had to find itself a whole new lot of employees too!

Another employer was penalised $16,000 for filing to keep proper wage and time records and failing to provide written employment agreements.  An employer must provide every employee with a written employment agreement which covers at least the names of the employer and employee, the job title, hours of work, place of work, rate of pay and provisions relating to public holidays and restructuring.  As well as providing a copy to the employee the employer must keep a signed copy in its records.  As well as a signed copy the employer must also keep a copy of every draft copy of the agreement given to the employee to consider.

This is so the ERA and Labour Inspectors can see how any changes to the agreement progressed through the various drafts.  In this case the $16,000 fine would have been $56,000 but for the poor financial circumstances of the employer and its inability to pay.

In another recent case the inability to pay only resulted in the fine being spread out for payments over two years.  This was designed to help keep the employer going (so the employees didn’t lose their jobs) but penalised the employer for its poor behaviour.

In another case an employee had resigned but thought they had been underpaid so asked the employer for a copy of the wage records.  The employer failed to immediately provide these.  The ERA penalised the employer $2,000 for the delay in providing the records.  The fact the employee had resigned was not a reason to withhold the records.

It pays to know your obligations as an employer for record keeping and to comply with those requirements.

Alan Knowsley

Employment Lawyer Wellington