Why Payroll Matters

Unlawful deductions, wage compliance, underpayments and even overpayments can damage employee trust, lead to reputational damage and possible prosecution. Talk to Payroll Matters about how we can make sure your books are in order.

Employees encouraged to report payroll breaches

  • NZ Corrections Department ordered to pay $16m to rectify Holiday Act breaches.
  • McDonalds required to pay 60,000 employees for unpaid leave entitlements over ten years.
  • A review of the Auckland Council payroll system uncovered errors costing $16m.

Big or small, nobody is above the law and ignorance is no excuse.

The Ministry for Business, Innovation and Employment (MBIE) will prosecute whether or not errors were a genuine mistake or oversight. The number of Labour inspectors has been doubled, and employees are encouraged to dob you in.

MBIE audits are random. Don’t take a chance with your payroll. Talk to Payroll Matters about getting your payroll in good order.

Here are a few examples of high-profile businesses that paid the price for non-compliance:

Not paying employees for pre-work meetings

The penalties:

  • Must comply with the MBIE improvement notice and fix practices
  • Paying employees arrears

Excerpt from MBIE’s ruling: “If the activity is integral to the employees’ role, and there is expectation to attend – this is work, and employees should be paid for it.We encourage any other employers who currently are failing to pay their employees for such activities… to fix these practices, as following this decision, they cannot continue to plead ignorance.”

Failing to provide employees with correct employment agreements, and failing to keep correct wage, time, holiday and leave records

The penalties:

  • $32,400 fine
  • $54,000 paid to staff in arrears

Excerpt from MBIE’s ruling: “It is disappointing to see companies operating under established brands failing to provide staff with their minimum rights.”

Failing to give staff a lieu day after working on a public holiday

The penalty: ordered to give alternative holidays (or the equivalent pay) accrued by all past and present employees. This is estimated to cost$1.6 million.

Excerpt from MBIE’s ruling: “Employers who configure their payroll system in a way that is convenient to themselves without proper regard to their obligations run a high risk of being non-compliant. While these considerations may require additional effort for some businesses, this is the law and they must abide by it”.

© Payroll Matters 2020