Employer ordered to pay almost $34,000 after it illegally charged an employee to keep employment...

An employer has been ordered to pay an employee almost $34,000 because the employer was illegally making the employee “pay back” part of his wages.

The employee worked for the employer between December 2011 and February 2017, and during most of this time the employee was making weekly payments to the employer of approximately $200.

The employer initially explained these payments as rent, however, at no time did the employee reside at the premises owned by the employer. The employer later changed its story which further questioned the employer’s credibility.

The ERA found that the payments were more than likely to have been required by the employer to support the employee’s immigration application.

The employer was paying the employee at a rate which met the required threshold for immigration, but the payments back to the employer by the employee meant that the employer did not actually pay at the correct rate as contained in the employment agreement.

The ERA described the employee’s weekly payment as premiums which were illegally sought and received by the employer.

The employee was awarded the total amount of premiums paid plus interest.

Under New Zealand law, it is illegal for an employer to charge an employee a fee for their employment. In recent cases it has been seen that some employers have exploited migrant workers by charging them money in exchange for giving them a job, so the employee can obtain work visas.

If an employer engages in this type of behaviour, not only will it be required to pay the money back to the employee, but in addition, the ERA is likely to impose penalties.

Ben Ruback

Employment Lawyer Wellington